The 136 codon (408 bp) denA gene encoding endonuclease II (Endoll) of bacteriophage T4 was unambiguously identified through sequencing and subsequent cloning. Endoll prepared from cloned DNA through coupled in vitro transcription-translation nicked and cut DNA in vitro in a sequence-specific manner. In vitro (and in vivo), the bottom strand was nicked between the first and second base pair to the right of a top-strand CCGC motif shared by favoured in vitro and in vivo cleavage sites; top-strand cleavage positions varied. To the right of the cleavage position, favoured in vitro sites lacked a sequence element conserved at favoured in vivo sites. In pBR322 DNA, the sites cleaved in vivo as previously described were also cleaved in vitro, but in vitro additional sites were nicked or cleaved and the preference for individual sites was different. Also, different from the in vivo reaction, nicking was more frequent than ds cutting; in many copies of a ds cleavage site, only the bottom strand was nicked in vitro. A model is discussed in which sequential nicking of the two strands, and different factors influencing bottom-strand nicking and top-strand nicking, can explain the differences between the in vitro and the in vivo reaction.