We have assembled transcriptionally active chromatin on 5S DNA plasmids by using a Xenopus oocyte supernatant and the 5S-specific transcription factor IIIA (TFIIIA). In this system, the 5S RNA gene is accurately transcribed at a rapid rate of 50 transcripts per gene per hr. By following the time course of RNA synthesis during chromatin assembly, the dose response to TFIIIA addition, and the effect of novobiocin on the assembled nucleoprotein, we show that there is a strict correlation between transcriptional activity and the generation of torsionally strained DNA supercoils in "dynamic chromatin." Transcription cannot be the cause of the dynamic structure, because the assembly of this chromatin is unaffected by alpha-amanitin levels that completely block RNA polymerase III. Surprisingly, the dynamic chromatin remains transcriptionally active after relaxation with DNA topoisomerase I, which implies that the essential parameter for chromatin transcription is gyration per se, and not its effect on DNA topology.