We have reconstituted the holoenzyme of the human mitochondrial DNA polymerase from cloned and overexpressed catalytic and accessory subunits. We have examined the polymerization activity of the catalytic subunit alone and of the holoenzyme to establish the function of the accessory subunit in this two subunit enzyme. The accessory subunit associates with the catalytic subunit with a dissociation constant of 35 +/- 16 nM as measured by the concentration dependence of its effect in stimulating maximal DNA binding and polymerization. At saturating concentrations, the accessory subunit contributes to every kinetic parameter examined to facilitate tighter binding of DNA and nucleotide and faster replication. The accessory protein makes the DNA binding 3.5-fold tighter (K(d) of 9.9 +/- 2.1 nM compared to 39 +/- 10 nM for the catalytic subunit alone) without significantly affecting the DNA dissociation rate (0.02 +/- 0.001 compared to 0.03 +/- 0.001 s(-)(1)). The ground-state nucleotide binding is improved from 4.7 +/- 2.0 to 0.78 +/- 0.065 microM, and the maximum DNA polymerization rate is increased from 8.7 +/- 1.1 to 45 +/- 1 s(-)(1) by the addition of the accessory protein. This leads to an increase in processivity from an estimated 290 +/- 46 to 2250 +/- 162. Although the accessory protein has been described as a "processivity factor" because of its effect on the ratio of rate constants defining processivity, this terminology falls short of adequately describing the profound effects of the small subunit on nucleotide-binding and incorporation catalyzed by the large subunit. By using the complete holoenzyme, we can now proceed with a comprehensive analysis of the structural and mechanistic determinants of enzyme specificity that govern toxicity of nucleoside analogues used in the treatment of viral infections such as AIDS.