Terminases are enzymes common to complex double-stranded DNA viruses and are required for packaging of the viral genome into a preformed capsid. The overexpression of bacteriophage lambda-terminase in Escherichia coli has been previously reported (Chow, S., Daub, E., and Murialdo, H. (1987) Gene (Amst.) 60, 277-289), and we present here a purification scheme for the isolation of milligram quantities of protein which is homogenous ( > 97%) as determined by SDS-polyacrylamide gel electrophoresis. lambda-Terminase is composed of the gene products of Nu1 and A. Using N-terminal amino acid sequence analysis of the purified protein, we have determined a subunit stoichiometry of 2 gpNu1 polypeptides/gpA molecule in terminase holoenzyme. The circular dichroism spectrum for the purified holoenzyme has been obtained and is consistent with a protein complex composed primarily of alpha-helical structure. The endonucleolytic activity of the enzyme (the TER reaction) has been optimized with respect to pH, salt, and polyamine concentrations. Divalent metal ion is strictly required for the reaction and may be satisfied by either magnesium or manganese, but not by any of the other metals examined. E. coli integration host factor in amounts stoichiometric with the DNA substrate stimulates the TER reaction, but only when the enzyme is present in limiting amounts. Increasing the enzyme/DNA ratio attenuates the observed stimulation by integration host factor. A kinetic analysis of the TER reaction suggests that the assembly of multiple terminase promoters is required for efficient cleavage of viral DNA and that this reaction appears to be stoichiometric, rather than catalytic under the reaction conditions utilized. The implications of these results with respect to the packaging of viral DNA by terminase enzymes are discussed.