A small RNA associated with an isolate of barley yellow dwarf virus (BYDV) has been described which has the physical properties of a satellite RNA (Miller et al., Virology 183, 711-720, 1991). Here we demonstrate that this RNA has the biological properties of a satellite RNA it requires the presence of helper virus (BYDV genomic) RNA for replication and the helper RNA does not require the satellite. To obtain pure satellite RNA, a permuted dimeric clone was constructed from which infectious satellite RNA could be transcribed in vitro. The dimeric transcript self-cleaved to produce monomeric satellite RNA. When this RNA was coelectroporated with BYDV genomic RNA into oat protoplasts, replication of both RNAs was detected by Northern hybridization. The RPV, but not the PAV, serotype of BYDV supported satellite RNA replication. The presence of discrete oligomeric forms of (+) and (-) sense satellite RNA in infected protoplasts suggests that both strands replicate by a rolling circle mechanism.