Particular combinations of fungal strains and transformation vectors allow for fungal rearrangement of normally integrative plasmids, resulting in the creation of linear self-replicating plasmids in Fusarium oxysporum. The rearrangement results in the results in the addition of fungal DNA, including telomere consensus sequences, to plasmid termini. The mechanism by which this rearrangement occurs is unclear, but it has similarities to extrachromosomal gene amplification. A DNA fragment which allows for linear autonomous replication upon reintroduction to the fungus was subcloned and sequenced. This DNA sequence contains the repeated telomeric sequence TTAGGG flanked by a region of twofold symmetry consisting primarily of pUC12 DNA. Isolation and identification of this sequence is the first step toward development of vectors that function as artificial chromosomes in filamentous fungi. This sequence was shown to promote autonomous replication and enhance transformation in several strains of F. oxysporum, Nectria haematococca, and Cryphonectria parasitica.