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Question is rather self-explanatory.

Putting aside other post-transcriptional factors like rate of degradation of transcript, what is the smallest gene ever reported to have successfully been transcribed in E. coli or other similar prokaryotic systems? Why couldn't this gene be any smaller?

Note that in the context of this question, I am disregarding factors like promoters, operators and terminators. Also note that this gene does not necessarily need to code for a protein.

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One example of short transcripts in bacteria would be transcriptional riboswitches when they are in the "off" state. –  Mad Scientist Jul 24 '13 at 6:45
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In terms of naturally-occurring "genes" I think that the record is probably held by the attenuator peptides.

In bacteria, the regulatory mechanism known as transcription attenuation involves the ribosomal biosynthesis of very short peptides. In the trp operon, where the phenomenon was first described by Yanofsky's group, the peptide, MKAIFVLKGWWRTS, consists of just 14 amino acids. Other examples, described subsequently, are of comparable size.

Now that I have written this answer, I have reread your question and I see that you are really interested in transcripts. In the case of the attenuators, the peptides are encoded by the 5' end of a much larger transcript, so they probably don't count for you.

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