Bacteriophage Mu contains an unusually strong DNA gyrase binding site (SGS), located near the center of its genome, that is required for efficient Mu DNA replication (M. L. Pato, Proc. Natl. Acad. Sci. USA 91:7056-7060, 1994; M. L. Pato, M. M. Howe, and N. P. Higgins, Proc. Natl. Acad. Sci. USA 87:8716-8720, 1990). Replication of wild-type Mu initiates about 10 min after induction of a lysogen, while replication in the absence of the SGS is delayed about an hour. To determine which step in the replication pathway is blocked in the absence of the SGS, we inactivated the SGS by deletion and by insertion and studied the effects of these alterations on various stages of Mu DNA replication. Following induction in the absence of a functional SGS, early transcription and synthesis of the Mu-encoded replication proteins occurred normally. However, neither strand transfer nor cleavage at the Mu genome termini could be detected 40 min after induction. The data are most consistent with a requirement for the SGS in the efficient synapsis of the Mu prophage termini to form a separate chromosomal domain.