While plasmids were originally considered to be generally circular until almost two decades ago, linear elements were reported to exist as well. They are now known to be common genetic elements in both, pro- and eukaryotes. Two types of linear plasmids exist, the so-called hairpin plasmids with covalently closed ends and those with proteins bound to their 5' termini. Hairpin plasmids are common in human-pathogenic Borrelia spirochetes, in which they are instrumental in escape from the immunological response; cryptic hairpin elements are present in mitochondria of the plant pathogenic fungus Rhizoctonia solani. Plasmids with 5' attached proteins constitute the largest group. In actinomycetous bacteria they are conjugative and usually confer advantageous phenotypes, e.g. formation of antibiotics, degradation of xenobiotics, heavy-metal resistance and growth on hydrogen as the sole energy source. In contrast, the majority of linear plasmids from eukaryotes are cryptic, with only a few exceptions. In some yeasts a killer phenotype may be associated, the most thoroughly investigated elements being those from Kluyveromyces lactis killer strains. In Neurospora spp. and in Podospora anserina, senescence and longevity respectively are correlated with linear plasmids. This review focuses on the biology of linear plasmids, their environmental significance and their use as tools in molecular and applied microbiology.