Telomere Binding Activity (TBA), an abundant protein from Saccharomyces cerevisiae, was identified by its ability to bind to telomeric poly(C1-3A) sequence motifs. The substrate specificity of TBA has been analyzed in order to determine whether the activity binds to a unique structure assumed by the irregularly repeating telomeric sequences or whether the activity recognizes and binds to subset of specific sequences found within the telomere repeat tracts. Deletion analysis and DNase I protection assays demonstrate that TBA binds specifically to two poly-(C1-3A) sequences that differ by one nucleotide. The methylation of four guanine residues, located at identical relative positions within these two binding sequences, interferes with TBA binding to the substrates. A synthetic olignucleotide containing a single TBA binding site can function as a TBA binding substrate. The TBA binding site shares homology with the binding sites reported for the Repressor/Activator Protein 1 (RAP1), Translation Upshift Factor (TUF) and General Regulatory Factor (GRFI) transcription factors, and TBA binds directly to RAP1/TUF/GRFI substrate sequences. Yeast TBA preparations and the RAP1 gene product expressed in E. coli cells are both similarly sensitive to in vitro protease digestion. Affinity-purified TBA extracts include a protein indistinguishable from RAP1 in binding specificity, size, and antigenicity. The binding affinity of TBA for the two telomeric poly(C1-3A) binding sites is higher than its affinity for any of the other binding substrates used for its identification. In extracts of yeast spheroplasts prepared by incubation of yeast cells with Zymolyase, an altered, proteolyzed form, of TBA (TBA-S) is present. TBA-S has a faster mobility in gel retardation assays and SDS-PAGE gels, yet it retains the DNA binding properties of standard TBA preparations: it binds to RAP1/TUF/GRFI substrates with the same relative binding affinity and protects poly(C1-3A) tracts from DNase I digestion with a "footprint" identical to that of standard TBA preparations.