The pFOXC mitochondrial retroplasmids are small, autonomously replicating linear DNAs that have a telomere-like repeat of a 5-bp sequence at their termini. The plasmids are possible evolutionary precursors of the ribonucleoprotein complex telomerase, as they encode an active reverse transcriptase (RT) that is involved in plasmid replication. Using an in vitro system to study reverse transcription, we show that the pFOXC RT is capable of copying in vitro-synthesized RNAs by use of cDNA primers or extension of snapped-back RNA templates. The ability of the pFOXC RT to use base-paired primers distinguishes it from the closely related RTs encoded by the Mauriceville and Varkud mitochondrial retroplasmids of Neurospora spp. Reaction products are similar, but not identical, to those obtained with conventional RTs, and differences reflect the ability of the pFOXC RT to initiate cDNA synthesis with loosely associated primers. The pFOXC RT can also copy DNA templates and extend 3 mismatched DNA oligonucleotide primers. Analysis of pFOXC in vivo replication intermediates suggests that telomeric repeats are added during reverse transcription, and the ability to extend loosely associated primers could play a role in repeat formation by mechanisms similar to those associated with telomerase and certain non-long-terminal-repeat retrotransposons.Plasmids pFOXC2 and pFOXC3 are 1.9-kb linear DNAs that reside in mitochondria of certain forma specialis of the fungal plant pathogen Fusarium oxysporum (17). The plasmids are classified as retroplasmids because they each encode a reverse transcriptase (RT) and replicate via an RNA intermediate (18, 24). To date, retroplasmids have been found only in mitochondria of six species of filamentous fungi and fall into two groups, linear and circular, based on the structure of the plasmid DNA (1,3,7,14,20).Plasmids pFOXC2 and pFOXC3 have an interesting structure that is described as a "clothespin," as it includes a hairpin at one terminus and two to five copies of a pentameric repeat (5Ј-ATCTA) at the other terminus (24). This structure is unique among plasmids that have been identified thus far, yet it bears some resemblance to eukaryotic chromosomes that contain multiple copies of short DNA sequences at their termini. The association of genetic elements that have telomerelike repeats and replicate via reverse transcription suggests that the pFOXC plasmids may be contemporary descendants of primitive chromosomes and/or have a direct evolutionary relationship to telomerase, the ribonucleoprotein (RNP) complex that protects and maintains the ends of chromosomes. Phylogenetic analysis of the RT encoded by the pFOXC plasmids (pFOXC RT) indicates that it is most closely related to the RTs encoded by the Mauriceville and Varkud circular retroplasmids of Neurospora spp. (24). As a group, mitochondrial retroplasmids are deeply rooted within the RT phylogenetic tree and are thought to be ancestral to other retroelements, including telomerase RTs (TERTs) (9, 10). The ancestral nature of mitochondrial ...