Bacteriophage T7 codes for a single-stranded DNA binding protein. This protein is the product of gene 2.5 and has been found previously to stimulate specifically the activity of the phage-coded DNA polymerase. We report here that the T7 DNA binding protein also stimulates the activity of the phage-coded exonuclease. The gene 6 exonuclease is a double-stranded DNA specific 5'-exonuclease that has been implicated in destruction of bacterial DNA, removal of RNA primers during DNA replication, genetic recombination, and DNA maturation. The enzyme is markedly inhibited by physiological concentrations of NaCl. This inhibition, which is due to a marked reduction in the Vmax of the enzyme, can be largely overcome by the phage-coded DNA binding protein. This stimulation is specific since the Escherichia coli DNA binding protein is without effect. The stimulation by the binding protein is apparently not due to its coating of the 3' single-stranded tails generated during the digestion. Kinetic studies show that the stimulation is due to a combined effect on both the Km and Vmax of the exonuclease. These studies are consistent with a loose binding of the binding protein to either the DNA or the exonuclease.