Qbeta replicase (RNA-directed RNA polymerase of bacteriophage Qbeta) exponentially amplifies certain RNAs in vitro. Previous studies have shown that Qbeta replicase can initiate and elongate on a variety of RNAs; however, only a minute fraction of them are recognized as 'legitimate' templates. Guanosine 5'-triphosphate (GTP)-dependent initiation on a legitimate template generates a stable replicative complex capable of elongation in the presence of aurintricarboxylic acid, a powerful inhibitor of RNA-protein interactions. On the contrary, initiation on an illegitimate template is GTP independent and does not result in the aurintricarboxylic-acid-resistant replicative complex. This article demonstrates that the 3' and 5' termini of a legitimate template cooperate during and after the initiation step. Breach of the cooperation by dividing the template into fragments or by introducing point mutations at the 5' terminus reduces the rate and the yield of initiation, increases the GTP requirement, decreases the overall rate of template copying, and destabilizes the postinitiation replicative complex. These results revive the old idea of a functional circularity of legitimate Qbeta replicase templates and complement the increasing body of evidence that functional circularity may be a common property of RNA templates directing the synthesis of either RNA or protein molecules.