A simple new strategy for the in vitro synthesis of circular RNAs and hairpin ribozymes is described. Circular single-strand DNA oligonucleotides 67-79 nt in length are constructed to encode both hairpin ribozyme sequences and ribozyme-cleavable sequences. In vitro transcription of these small circles by Escherichia coli RNA polymerase produces long repeating RNAs by a rolling circle mechanism. These repetitive RNAsundergo self-processing, eventually yielding unit length circular and linear RNAs as the chief products. The transcription is efficient despite the absence of promoter sequences, with RNA being produced in up to 400 times the amount of DNA circle used. It is shown that the linear monomeric hairpin ribozymes are active in cleaving RNA targets in trans , including one from HIV-1. Several new findings are established: (i) that rolling circle transcription can be extended to the synthesis of catalytic RNAs outside the hammerhead ribozyme motif; (ii) that rolling circle transcription is potentially a very simple and useful strategy for the generation of circular RNAs in preparative amounts; and (iii) that self-processed hairpin ribozymes can be catalytically active in trans despite the presence of self-binding domains.