Circular non-polyadenylated RNA molecules have been identified as stable 
transcription products of the human ETS-1 and mouse Sry genes. RNA 
circularization has been proposed to require two steps. The first step utilizes 
intramolecular base pairing to produce a transient stem-loop structure. The 
second step involves splicing a downstream donor splice site (DSS) to a now 
closely appositioned upstream acceptor splice site (ASS) within the loop. We 
demonstrate that the presence of long inverted repeats (IR) flanking the mouse 
Sry gene leads to the formation of the Sry circular transcript in cultured 
cells. Circularization requires the presence of both IR. As few as 400 
complementary nt are necessary for this process. The presence of the IR does not 
significantly stimulate intermolecular annealing and trans-splicing in vivo.