Prokaryotic DNA replication is compartmentalized at the cellular membrane. The Bacillus subtilis phage 29-encoded membrane protein p16.7 is one of the few proteins known to be involved in the organization of prokaryotic membrane-associated DNA replication. The functional DNA binding domain of p16.7 is constituted by its C-terminal half, p16.7C, which forms high affinity dimers in solution and which can form higher order oligomers. Recently, the solution and crystal structures of p16.7C and the crystal structure of the p16.7C-DNA complex have been solved. Here, we have studied the p16.7C dimerization process and the structural and functional roles of p16.7 residues Trp-116 and Asn-120 and its last nine C-terminal amino acids, which form an extended tail. The results obtained show that transition of folded dimers into unfolded monomers occurs without stable intermediates and that both Trp-116 and the C-terminal tail are important for dimerization and functionality of p16.7C. Residue Trp-116 is involved in formation of a novel aromatic cage dimerization motif, which we call "Pro cage." Finally, whereas residue Asn-120 plays a minor role in p16.7C dimerization, we show that it is critical for both oligomerization and DNA binding, providing further evidence that DNA binding and oligomerization of p16.7C are coupled processes.Compelling evidence has accumulated that DNA replication of eukaryotic and prokaryotic genomes occurs in so-called replication factories, which probably contain, besides replicative DNA polymerases, all other enzymes involved in DNA replication and related processes (1-3). Imaging techniques demonstrated that replication factories are located at rather static positions, implying that they are attached to subcellular structure(s) (reviewed in Ref. 4), which in bacteria is the cytosolic membrane (for reviews, see Refs. 5 and 6). Besides functioning as a scaffold, membrane association inherently compartmentalizes replicative complexes, allowing surface catalysis, which increases the efficiency of the DNA replication process (7,8). Little is known, however, about proteins involved in the organization of membrane-associated replication of genomes. An exception is the well studied Bacillus subtilis phage 29 (for a review, see Ref. 9). The genome of 29 consists of a linear double-stranded DNA (dsDNA) 3 of 19,285 bp that contains a terminal protein (TP) covalently linked at each 5Ј-end. Initiation of 29 DNA replication occurs via a so-called protein-primed mechanism (reviewed in Refs. 10 and 11). The first step involves recognition of the origins of replication, constituted by the TPcontaining DNA ends, by a 29-encoded DNA polymerase/TP heterodimer. After origin recognition, the DNA polymerase catalyzes the covalent attachment of the first nucleotide to the TP molecule present in the heterodimer. Then, after a transition step, these two proteins dissociate, and the DNA polymerase continues processive elongation, which is coupled to strand displacement, until replication of the nascent DNA strand is compl...