Linear simian virus 40 DNA has been transcribed in vitro with wheat germ RNA polymerase II. Transcription products have been fractionated on polyacrylamide gels and several discrete sized RNA bands are seen. The RNA band pattern is affected dramatically by deoxyribonuclease treatment during RNA isolation. This is because most of the RNA synthesized is covalently linked to DNA. This linkage has been demonstrated by density analysis in formaldehyde-CsCl gradients and by incorporation of alkali-stable ribonucleotides into DNA. The linear DNA templates transcribed were generated by treatment of circular DNA with restriction enzymes which, in addition to cutting once at a single primary site, were found also to produce single strand nicks at specific secondary sites. The discrete sized RNA bands observed result from initiation at these nicks and terminated at DNA ends. There are two modes of nick-dependent initiation. In one mode the 3'-hydroxyl terminus of the DNA at a single strand nick serves as a primer for the extension of an RNA chain. In a second mode de novo initiation of an RNA chain is promoted at the nick. RNAs which are not primed initiate predominantly with GTP. The catalytic action of wheat germ RNA polymerase II is similar to that of Escherichia coli core RNA polymerase which has also been shown to synthesize primarily RNA which is covalently linked to DNA.