The temperate Yersinia phage PY54 belongs to the unusual group of phages that replicate as linear plasmids with covalently closed ends. Besides Escherichia coli phage N15, PY54 is the only member of this group to be identified. We have determined the complete sequence (46,339 bp) of the PY54 genome. Bioinformatic analyses revealed 67 open reading frames (ORFs) with good coding potential located on both DNA strands. The comparison of the deduced PY54 gene products with known proteins encoded by other phages and bacteria along with functional studies have enabled us to assign the possible functions of 25 ORFs. In the left arm of the PY54 genome, we identified a number of ORFs that obviously code for head and tail proteins. Furthermore, this part of the phage genome contains genes probably involved in plasmid partitioning. Regarding the predicted gene functions and gene order, the PY54 and N15 left arms are similar. However, there are only weak DNA homologies and, in contrast to N15, the Yersinia phage harbours only a few ORFs related to genes found in lambdoid phages. The PY54 right arm comprises mainly regulatory genes as well as genes important for plasmid replication, DNA methylation, and host cell lysis. Out of 36 deduced products of the right arm, 13 revealed strongest database homologies to N15 proteins, of which the protelomerase and the Rep protein are exclusively homologous to their N15 counterparts. A number of PY54 genes essential for the lytic or lysogenic cycle were identified by functional analysis and characterization of phage mutants. In order to study transcription during the lytic and lysogenic stage, we analysed 34 PY54 ORFs by reverse transcriptase (RT)-PCR. The phage transcription patterns in lysogenic bacteria and at the late lytic stage of infection are nearly identical. The reasons for this finding are spontaneous release of phages during lysogeny and a high rate of phages that lysogenize their Yersinia host upon infection.