Endonuclease VII is a Holliday-structure-resolving enzyme of bacteriophage T4. The active protein is a homodimer with 157 amino acids/monomer. An amber mutation (amE727 in codon 151) inactivates the nuclease completely, indicating the importance of the seven C-terminal amino acids for nucleolytic activity. The influence of these amino acids on cruciform-DNA binding and cleavage was investigated through functional analysis of C-terminal-truncated proteins derived from deletion constructs. It was found that the three C-terminal amino acids are not necessary for binding and cleavage. A transition from active to inactive protein occurs gradually with truncations of the next four amino acids. Reduction of DNA-binding ability, as measured by electrophoretic mobility shift assays, was determined to be the primary defect in the cleavage-deficient proteins. This was further concluded by the finding that EVII-(1-150)-peptide(amber), a protein with fairly low affinity to cruciform DNA, contributes cleavage activity to reactions of wild-type EVII with cruciform DNA. [Asp62]EVII-(1-156)-peptide lacking one C-terminal amino acid, contains a point mutation in codon 62 that eliminates the nucleolytic activity of the protein while retaining its DNA-binding proficiency. By mixing binding-deficient and cleavage-deficient mutants in the same assay, cleavage of cruciform DNA resumed. Evidence is presented that complementation occurs by heterodimer formation. Our results show that the zinc-binding motif of EVII is not sufficient for cruciform-DNA binding.