A cell-free system for studying Sendai virus RNA synthesis was reconstituted from N protein:RNA templates and transfected cell extracts in which the viral N, P and L proteins were expressed. Both transcription (mRNA synthesis) and replication (genome and antigenome synthesis) took place concurrently in these reactions. Viral RNA polymerases engaged in replication (replicases) were found to elongate their chains at a constant speed along the genome (1.7 nt/s), in a highly processive manner. In contrast, viral RNA polymerases engaged in transcription (transcriptases), although capable of synthesizing RNA at a comparable speed to replicases, were poorly processive. In this system, therefore, transcriptases require special reaction conditions to promote processivity that are not required by replicases. In addition, during replication, incomplete nascent genome chains were shown to be assembled with N protein, providing direct evidence that the synthesis and assembly of genomes are concurrent events. The strong processivity of replicases, independent of the reaction conditions, may thus be due to the coupling of genome synthesis and assembly. A model is proposed to explain how pausing of viral polymerase on the template is restricted when assembly and synthesis of the nascent chain are coupled.