We report that structural transitions of DNA cause the ON OFF switching of transcriptional activity in cooperation with phospholipid membrane in a reconstituted artificial cell. It has been shown that long DNA of more than 20-30 kilo base-pairs exhibits a discrete conformational transition between a coiled state and highly folded states in aqueous solution, depending on the presence of various condensing agents such as polyamine. Recently, we reported a conformational transition of long DNA through interplay with phospholipid membrane, from a folded state in aqueous phase to an extended coil state on a membrane surface, in a cell-sized water-in-oil microdroplet covered by phosphatidylethanolamine monolayer (Kato, A.; Shindo, E.; Sakaue, T.; Tsuji, A.; Yoshikawa, K. Biophys. J. 2009, 97, 1678-1686). In this study, to elucidate the effects of these conformational changes on the biologically important function of DNA, transcription, we investigated the transcriptional activity of DNA in a microdroplet. Transcriptional activity was evaluated at individual DNA molecule level by a method we developed, in which mRNA molecules are labeled with fluorescent oligonucleotide probes. Transcription proceeded on almost all of the DNA molecules with a coiled conformation in the aqueous phase. In the presence of a tetravalent amine, spermine, the DNA had a folded conformation, and transcription was completely inhibited. When the Mg2+ concentration was increased, DNA was adsorbed onto the inner surface of the membrane and exhibited an extended conformation. The transcription experiments showed that this conformational transition recovered transcriptional activity; transcription occurred on DNA molecules that were on the membrane.