The interconversion between the right (R) and left (L) helical forms of poly [d(G-C)] occurs at low concentrations of MgCI2 and EtOH, acting together in a highly synergistic manner. established by X-ray crystallography (Wang et al., 1979;Drew et al., 1980). However, L DNA formed in Mg2+-EtOH (which we designate as Z* DNA) has unique properties: a) it can be sedimented readily out of solution at low speed, indicative of condensation and intermolecular aggregation; b) it supports the binding of several intercalating (ethidium bromide, actinomycin D) and non-intercalating (mithramycin) drugs, although these interact preferentially with the R (i.e., B) form of DNA; and c) it functions as a template for Escherichia coli RNA polymerase. B and Z* DNAs can be generated under idential ionic conditions and compared in a number of biochemical systems. Our results suggest that left-handed DNA may form under physiological conditions and serve a biological function.