A DNA molecule carrying Mu end DNA sequence(s) is a poor target in the Mu DNA strand-transfer reaction, a phenomenon which is referred to as "target immunity." We find that Mu B protein stimulates intermolecular strand-transfer by binding to the target DNA. Our results show that a differential distribution of Mu B protein between "immune" and "non-immune" DNA molecules is responsible for target immunity; in the presence of Mu A protein and ATP, Mu B protein dissociates preferentially from immune DNA molecules. Hydrolysis of ATP is implicated in establishing the differential distribution of Mu B protein between immune and non-immune DNA molecules in the presence of Mu A protein; nonhydrolyzable ATP gamma S can support an efficient strand-transfer reaction even with a target DNA that is immune in a reaction with ATP.