In an automated machine that forms a vertically positioned and horizontally traversing web of plastic film into bags and fills the bags with material, the apparatus forms the bags sealed side edges as well as aligned perforations whereat the bags are severed from one another after they are filled with material. The web includes a pair of parallel proximate plastic film walls. A vertically positioned heat seal bar is moveable onto the web severing the walls along a separation line and forming the fore and aft sealed side edges of the bags. A perforation knife is aligned with and positioned vertically above the heat seal bar, and is simultaneously moveable onto the web walls with the heat seal bar thereby forming a vertical perforation line at a web longitudinal edge portion. The separation line and perforation line in the web are thereby aligned.