Vaccinia topoisomerase binds duplex DNA and forms a covalent DNA-(3'-phosphotyrosyl) protein adduct at the sequence 5'-CCCTT downward arrow. The enzyme reacts readily with a 36-mer CCCTT strand (DNA-p-RNA) composed of DNA 5' and RNA 3' of the scissile bond. However, a 36-mer composed of RNA 5' and DNA 3' of the scissile phosphate (RNA-p-DNA) is a poor substrate for covalent adduct formation. Vaccinia topoisomerase efficiently transfers covalently held CCCTT-containing DNA to 5'-OH-terminated RNA acceptors; the topoisomerase can therefore be used to tag the 5' end of RNA in vitro. Religation of the covalently bound CCCTT-containing DNA strand to a 5'-OH-terminated DNA acceptor is efficient and rapid (krel > 0.5 s-1), provided that the acceptor DNA is capable of base pairing to the noncleaved DNA strand of the topoisomerase-DNA donor complex. The rate of strand transfer to DNA is not detectably affected by base mismatches at the 5' nucleotide of the acceptor strand. Nucleotide deletions and insertions at the 5' end of the acceptor slow the rate of religation; the observed hierarchy of reaction rates is as follows: +1 insertion > -1 deletion > +2 insertion >> -2 deletion. These findings underscore the importance of a properly positioned 5'-OH terminus in transesterification reaction chemistry, but they also raise the possibility that topoisomerase may generate mutations by sealing DNA molecules with mispaired or unpaired ends.