Poxviruses are large mammalian DNA viruses which replicate exclusively in the cytoplasm of their hosts cells. Vaccinia virus infection results in the synthesis of a protein that promotes joint molecule formation and strand-transfer reactions 'in vitro'. This work demonstrates that this activity is also expressed by vaccinia DNA polymerase (gpE9L). Recombinant vaccinia DNA polymerase was produced using a hybrid vaccinia/T7 over-expression system and purified to homogeneity. This protein catalyzed joint molecule formation and strand transfer 'in vitro', in reactions containing single-stranded circular and linear duplex DNAs. The reaction required homologous substrates and magnesium ions and was stimulated by DNA aggregating agents such as spermidine-HCl and 'Escherichia coli' single-strand DNA binding protein. There was no requirement for a nucleoside triphosphate cofactor and the reaction does not have any inherent polarity. The reaction ceased when ~20% of the double-stranded substrate had been incorporated into joint molecules and required stoichiometric quantities of DNA polymerase. Electron microscopy showed that the joint molecules formed during these reactions contained displaced strands and thus represented the products of a strand-exchange reaction. In addition to catalyzing strand-transfer, this work shows that the 3 '-5' exonuclease of vaccinia DNA polymerase can catalyze single-strand annealing reactions 'in vitro', efficiently converting combinations of linear duplex substrates into linear or circular concatemers, in a manner directed by sequences located at the DNA ends. The reaction required as little as 12 bp of shared sequence. Varying the structures at the cleaved ends had no effect on efficiency. These duplex joining reactions appear to be dependent upon nucleolytic processing of the molecules by the 3'-5' proofreading exonuclease, as judged by the fact that only a 5'- 32P end label is retained in the joint molecules and the reaction is inhibited by dNTPs. The resulting concatemers are joined only through non-covalent bonds, but can be efficiently processed into stable molecules in ' E. coli' if the end homologies permit formation of circular molecules ' in vitro' and 'in vivo'. Besides providing a starting point for investigating the mechanism of viral concatemer formation, this reaction may have some application as a simple tool for directionally cloning PCR amplified DNAs.