The intracellular replicating form of T7 DNA is a concatemer in which the linear genomes are joined head to tail by sharing 160-bp terminally repeated sequences. For the efficient production of progeny phage particles, the concatemers must be processed to regenerate the ends by duplicating the joint part. M-hairpin end was implicated in this duplication since the hairpin seemed to be produced by a uni-directional rolling-circle type replication across the concatemer junction. We have isolated a recombinant T7 (T7 ΔM) deleted in the palindromic m region responsible for the hairpin. The progeny phage production was reduced by four-fold and the intracellular DNA revealed the accumulation of truncated left end by 160-bp suggesting the loss of the terminal repeat. This is consistent with the proposed mechanism of the T7 concatemer processing in which the duplicated concatemer junction with the M-hairpin provides the termination site packaging. [Supported by a grant from the Inje Foundation]