A circular RNA-DNA enzyme with higher activity to target RNA cleavage and higher stability than that of the hammerhead ribozyme in the presence of RNase A was obtained by in vitro selection. The molecule is composed of a catalytic domain of 22-mer ribonucleotides derived from the hammerhead ribozyme and a fragment of 55-mer deoxyribonucleotides. The DNA fragment contains two substrate-binding domains (9-mer and 6-mer, respectively) and a "regulation domain" (assistant 40-mer DNA with 20-mer random deoxyribonucleotides sequence), which probably play the role in the regulation of flexibility and rigidity of the circular RNA-DNA enzyme. The above results suggest that the circular RNA-DNA enzyme will have a great prospect in gene-targeting therapies. (C) 2002 Elsevier Science (USA).