Terminal deoxynucleotidyltransferase activity is absolutely dependent on the presence of a divalent cation in the reaction mixture. This requirement can be satisfied by either Mg2+, Co2+, or Mn2+. When Mg2+ is used, the reaction rate is inhibited by metal ligands, and this inhibition can be reversed by Zn2+. Reaction rates in Mg2+ are also stimulated by the addition of micromolar amounts of Zn2+. To examine the role of Zn2+ in terminal transferase catalysis we analyzed for Zn2+ in homogeneous recombinant human terminal transferase preparations and found that Zn2+ is not an intrinsic part of enzyme molecule. Analysis of Zn2+ binding to terminal transferase under equilibrium conditions shows about 0.3 g of atom of Zn2+/mol of enzyme, suggesting that Zn2+ forms an easily dissociable complex with the enzyme molecule. Kinetic analyses showed that the stimulatory effect of Zn2+ is observed in several buffer systems. Zn2+ increases the affinity of the enzyme for the initiator about 2-fold and decreases affinity for dATP more than 10-fold, resulting in an increase in the apparent Vmax of the reaction. Using a 3'-ended 2',3'-dideoxyoligonucleotide as an inhibitor demonstrates that the inhibitor has no effect on the reaction rate in the absence of Zn2+ but is competitive with respect to the initiator in the presence of Zn2+. These results suggest that Zn2+ is a positive effector for terminal transferase, interacting with oligonucleotide and enzyme near the initiator binding site. Binding of Zn2+ to the enzyme appears to induce conformational changes that greatly increase the Vmax of the reaction with a concomitant decrease in the affinity of the enzyme for dNTP.