Empty procapsids of the segmented dsRNA virus phi 6, produced in Escherichia coli from a cloned L genome segment, package plus-strand phi 6 ssRNA genomic segments, synthesize minus strands, and transcribe the newly formed dsRNA templates. Procapsids can be restricted to minus-strand synthesis by high concentrations of CaCl2 or low concentrations of nucleotides, enabling us to separate the viral minus-strand (replication) and plus-strand (transcription) RNA-dependent RNA polymerase activities in vitro. Reaction conditions for minus-strand synthesis were optimized. Plus-strand synthesis by procapsids could be activated by binding of purine nucleoside triphosphates to a low-affinity NTP-binding site. The second 5'-terminal nucleotide of the phi 6 plus-sense ssRNA L genomic segment is important for determining the level of transcription of that segment and the generation of infectious procapsids.