Circular non-polyadenylated RNA molecules have been identified as stab
le transcription products of the human ETS-1 and mouse Sry genes, RNA
circularization has been proposed to require two steps, The first step
utilizes intramolecular base pairing to produce a transient stem-loop
structure. The second step involves splicing a downstream donor splic
e site (DSS) to a now closely appositioned upstream acceptor splice si
te (ASS) within the loop. We demonstrate that the presence of long inv
erted repeats (IR) flanking the mouse Sry gene leads to the formation
of the Sry circular transcript in cultured cells. Circularization requ
ires the presence of both IR. As few as 400 complementary nt are neces
sary for this process, The presence of the IR does not significantly s
timulate intermolecular annealing and trans-splicing in vivo.