The terminal nucleotide sequence of the Lactobacillus casei bacteriophage A2 DNA revealed a single-stranded extension 13 bases in length (5'-AACGGTCGGCCTC-3') at its 3' termini that defines the packaging initiation nicking site (cosN). The cosN sequence is bisected by an axis of hyphenated twofold rotational symmetry. Directly and inverted repeated sequences located to the left (cosL) and the right (cosR) of the cosN site were observed. Analysis of the 3.4 kb EcoRI DNA sequence surrounding the cos region revealed four complete and one incomplete open reading frames (orfs). Northern blots indicated that all were cotranscribed in a single mRNA molecule in excess of 10 kb that appeared late during infection. Minicell studies indicated that the four orfs were translated into protein. From the ORF3 amino acid sequence DNA-binding and NTP-binding domains can be predicted. The purified ORF3 (predicted molecular mass 16.8 kDa) shows specific binding to the A2 cos region, so it was renamed gp3. Gp3 forms a specific complex with a 369 bp cos DNA segment in the presence of ATP. Gp3 interaction with the intrinsically bent cos DNA segment induces intramolecular ligation in the presence of T4 DNA ligase. The data presented here suggest that gp3 is the small subunit of the terminase enzyme.