The high concentration of macromolecules within cells can result in large excluded volume effects. We have studied crowding effects under conditions that approach more closely to such cellular conditions by measuring reactions in the presence of very concentrated extracts from cells of Escherichia coli. We find the rate of a test reaction, the cohesion of complementary sequences of lambda DNA, to be accelerated by one or two orders of magnitude under such conditions. The increased reaction rate is correlated with condensation of the DNA. Condensation requires a DNA-binding protein fraction from the extracts. The amount of DNA-binding proteins causing these results can be decreased greater than 10-fold by concomitantly supplying a background of a purified polymer such as PEG 8000 which provides a moderate level of crowding. We suggest that both cytoplasmic crowding effects and DNA- binding proteins are required to cause the massive condensation of DNA into nucleoids in bacteria, a phenomenon which has remained a poorly understood characteristic of prokaryotes. A review of macromolecular crowding effects on genome structure and expression is being written for Biochimica Biophysica Acta. A more general review on macromolecular crowding in collaboration with Allen Minton was completed. Finally, during the course of this year, we moved our laboratory from Bldg. 2 to Bldg. 5, requiring a significant input of working time.