The processing of newly replicated concatameric T5 DNA into both single stranded DNA chains of unit length and single-stranded fragments of sizes comparable to those found in mature T5 virion DNA occurs in the absence of late T5 protein synthesis. The formation of unit-length, single-stranded DNA chains does not require the early T5 gene D15 nuclease; however, the subsequent formation of the single-stranded fragments does require that the D15 nuclease be functional. A reexamination of the properties of the purified D15 nuclease under a variety of conditions showed that, in addition to functioning as a 5'->3' exonuclease, the enzyme can also introduce endonucleolytic scissions into mature T5 DNA in a reaction that requires duplex T5 DNA and preexisting, singlestranded interruptions.The location, origin, and function of the specific, single-stranded interruptions (nicks) contained within the genome of bacteriophage T5 DNA have attracted considerable attention for a number of years. The proposed function of the nicks currently centers around their putative role in transcription of late T5 genes. This transcription is known to require the products of both the T5 "early" genes, C2 and D15 (3, 4). Szabo et al. (19) have provided some evidence supporting the proposal of Chinnadurai and McCorquodale (4) that the C2 gene product is a phage "sigma-like" factor, which, as a consequence of binding to Escherichia coli RNA polymerase, permits the host enzyme to recognize the late class of T5 DNA promoters. The gene D15 product is known to be a nuclease (6,9). Enzymatic studies of partially purified D15 nuclease have shown that the protein possesses 5'-*3' exonuclease activity on both singleand double-stranded DNA (6,14). T5 strains containing amber mutations in gene D15 not only fail to initiate late transcription, but also fail to introduce the single-stranded interruptions into newly replicated phage DNA (7).There are at least two mechanisms by which the gene D15 product could control the introduction of nicks into replicating T5 DNA. The first, and the most direct, hypothesis would be that the nuclease encoded by gene D15 can also function as a very specific endonuclease and thereby introduce the nicks into replicating DNA. This hypothesis would also be consistent with the proposal that a nicked DNA template is required for late transcription (11). The enzyme must, however, possess very little, if any, gen-eral endonucleolytic activity because the protein is unable to cleave either doubleor singlestranded circular OX174 DNA (6). Alternatively, the introduction of nicks into T5 DNA might be under more indirect control of the D15 gene. For example, gene D15 amber mutants are unable to synthesize late T5 RNA and proteins, and nicking would then be prevented with D15 mutants if either a late protein or complex of late proteins were required for this process. Our results favor the first hypothesis, and we present evidence suggesting that the D15 nuclease plays a direct role in introducing nicks into replicating T5 DNA. Nicking ...