Abstract Transcription and DNA replication are tightly regulated to ensure coordination of gene expression with growth conditions and faithful transmission of genetic material to progeny. A large body of evidence has accumulated, indicating that encounters between protein machineries carrying out DNA and RNA synthesis occur in vivo and may have important regulatory consequences. This feature may be exacerbated in the case of compact genomes, like the one of bacteriophage λ, used in our study. Transcription that starts at the rightward pR promoter and proceeds through the λ origin of replication and downstream of it was proven to stimulate the initiation of λ DNA replication. Here, we demonstrate that the activity of a convergently oriented pO promoter decreases the efficiency of transcription starting from pR. Our results show, however, that a lack of the functional pO promoter negatively influences λ phage and λ-derived plasmid replication. We present data, suggesting that this effect is evoked by the enhanced level of the pR-driven transcription, occurring in the presence of the defective pO, which may result in the impeded formation of the replication initiation complex. Our data suggest that the cross talk between the two promoters regulates λ DNA replication and coordinates transcription and replication processes.