In Saccharomyces cerevisiae cells harboring a GAL1 promoter-linked beta-galactosidase gene, the simultaneous expression of Escherichia coli DNA topoisomerase I and inactivation of yeast DNA topoisomerases I and II reduces the cellular level of beta-galactosidase to an undetectable level. Analysis of intracellular mRNA level and the density of RNA polymerase along DNA indicates that this reduction is due to the suppression of transcription and that both plasmid-borne and chromosomally located genes are affected. These results are interpreted in terms of inhibition of transcription in vivo due to positive supercoiling of the DNA template: preferential removal of transcription-generated negative supercoils by E. coli DNA topoisomerase I in the absence of both yeast DNA topoisomerases I and II results in the accumulation of positive supercoils in intracellular DNA. In normal prokaryotic or eukaryotic cells, accumulation of positive supercoils is presumably avoided through the balanced actions of DNA topoisomerases.