We show that intracellular transcription of G-rich regions produces novel DNA structures, visible by electron microscopy as large (150-500 bp) loops. These G-loops are formed cotranscriptionally, and they contain G4 DNA on one strand and a stable RNA/DNA hybrid on the other. G-loop formation requires a G-rich nontemplate strand and reflects the unusual stability of the rG/dC base pair. G-loops and G4 DNA form efficiently within plasmid genomes transcribed in vitro or in Escherichia coli. These results establish that G4 DNA can form in vivo, a finding with implications for stability and maintenance of all G-rich genomic regions.