Purified simian virus 40 (SV40) DNA is reconstituted into chromatin and transcribed by endogenous RNA polymerase II when microinjected into nuclei of Xenopus laevis oocytes. We have correlated the kinetics of chromatin reconstitution with that of accumulation of virus-specific RNA in this system. A delay of approximately 3 h was found in the appearance of appreciable numbers of both fully supercoiled molecules and transcriptionally active templates. SV40 minichromosomes, isolated from virus-infected monkey cells with 0.2 M NaCl, also exhibited this lag in onset of transcriptional activity when microinjected into oocytes. These findings indicate that neither purified SV40 DNA nor SV40 DNA containing a full complement of nucleosomes can function as a template for transcription in vivo before association with appropriate cellular nonhistone chromosomal factors has taken place. In addition, the gradual degradation of linear SV40 DNA in oocytes was not sufficient to account for the fact that it was much less transcriptionally active than circular SV40 DNA. Taken together, these results indicate that the conformational state of the DNA can affect its ability to function as a template for transcription in vivo by RNA polymerase II. In contrast, transcription by RNA polymerase III of purified, circularized cloned DNAs encoding genes for 5S rRNA was detectable long before the injected DNAs had time to reconstitute into chromatin. Therefore, the template structural requirements for transcription in vivo by RNA polymerases II and III are different.Several types of systems have been developed for studying transcription of cloned eucaryotic genes: microinjection of DNAs into nuclei of Xenopus oocytes (see reference 11 for review); transcription in monkey cells of genes linked to simian virus 40 (SV40) vectors (12, 28); expression of DNAs stably introduced into mammalian cells in culture (see reference 29 for review); and in vitro transcription with cell-free extracts (1,22,38,40). Together with the availability of DNA sequencing and in vitro mutagenesis techniques, these systems have enabled much progress to be made in the identification of elements within eucaryotic DNAs that are involved in regulating promotion and initiation of RNA synthesis. However, except for the elegant studies of Brown, Roeder, and their colleagues on control of transcription Xenopus 5S RNA genes (see reference 18 for review), only limited progress has been made to date concerning the roles played by either specific cellular chromosomal proteins or chromatin structure in regulating eucaryotic gene expression.