Small high-yielding binary Ti vectors of Agrobacterium tumefaciens were constructed to increase the cloning efficiency and plasmid yield in Escherichia coli and A. tumefaciens for transformation of higher plants. We reduced the size of the binary vector backbone to 4566bp with ColE1 replicon (715bp) for E. coli and VS1 replicon (2654bp) for A. tumefaciens, a bacterial kanamycin resistance gene (999bp), and the T-DNA region (152bp). The binary Ti vectors with the truncated VS1 replicon were stably maintained with more than 98% efficiency in A. tumefaciens without antibiotic selection for 4 days of successive transfers. The transcriptional direction of VS1 replicon can be the same as that of ColE1 replicon (co-directional transcription), or opposite (head-on transcription) as in the case of widely used vectors (pPZP or pCambia). New binary vectors with co-directional transcription yielded in E. coli up to four-fold higher transformation frequency than those with the head-on transcription. In A. tumefaciens the effect of co-directional transcription is still positive in up to 1.8-fold higher transformation frequency than that of head-on transcription. Transformation frequencies of new vectors are over six-fold higher than those of pCambia vector in A. tumefaciens. DNA yields of new vectors were three to five-fold greater than pCambia in E. coli. The proper functions of the new T-DNA borders and new plant selection marker genes were confirmed after A. tumefaciens-mediated transformation of tobacco leaf discs, resulting in virtually all treated leaf discs transformed and induced calli. Genetic analysis of kanamycin resistance trait among the progeny showed that the kanamycin resistance and sensitivity traits were segregated into the 3:1 ratio, indicating that the kanamycin resistance genes were integrated stably into a locus or closely linked loci of the nuclear chromosomal DNA of the primary transgenic tobacco plants and inherited to the second generation.