Bacteriophage P22, a podovirus infecting strains of Salmonella typhimurium, packages a 42-kbp genome using a headful mechanism. DNA translocation is accomplished by the phage terminase, a powerful molecular motor consisting of large and small subunits. Although many of the structural proteins of the P22 virion have been well characterized, little is known about the terminase subunits and their molecular mechanism of DNA translocation. We report here structural and assembly properties of ectopically expressed and highly purified terminase large and small subunits. The large subunit (gp2), which contains the nuclease and ATPase activities of terminase, exists as a stable monomer with an alpha/beta fold. The small subunit (gp3), which recognizes DNA for packaging and may regulate gp2 activity, exhibits a highly alpha-helical secondary structure and self-associates to form a stable oligomeric ring in solution. For wild-type gp3, the ring contains nine subunits, as demonstrated by hydrodynamic measurements, electron microscopy, and native mass spectrometry. We have also characterized a gp3 mutant (Ala 112-->Thr) that forms a 10-subunit ring, despite a subunit fold indistinguishable from wild type. Both the nonameric and decameric gp3 rings exhibit nonspecific DNA-binding activity, and gp2 is able to bind strongly to the DNA/gp3 complex but not to DNA alone. We propose a scheme for the roles of P22 terminase large and small subunits in the recruitment and packaging of viral DNA and discuss the model in relation to proposals for terminase-driven DNA translocation in other phages.