A DNA-dependent ATPase found in crude preparations of the phage T4 gene 32 protein, shown to be the product of the nonessential T4 dda gene, has been purified to apparent homogeneity and free of nucleases. The dda protein hydrolyzes ATP or dATP to the respective nucleoside diphosphates, in a reaction that is completely dependent on the presence of DNA. DNA in a single-stranded form is strongly preferred and there is little effect of differences in strand length or base composition. We show that the dda protein is the DNA helicase previously studied by Krell et al. (Krell, H., Durwald, H., and Hoffmann-Berling, H. (1979) Eur. J. Biochem. 94, 387-395); it can unwind extensive stretches of double-stranded DNA very rapidly, appearing to move with a 5'-3' polarity relative to the single DNA strand to which it initially binds. The reaction is highly distributive, indicating that the dda protein is continuously dissociating and reassociating with the DNA being unwound. The T4 gene 32 protein, a single-strand-binding, helix-destabilizing protein, competes with the dda protein for binding to single-stranded DNA. Consequently, it seems to inhibit rather than to promote the helicase reaction. The other known T4-encoded DNA helicase, the gene 41 protein, has little effect on the helicase activity of the dda protein. These results are relevant to the suspected role of the dda protein in phage T4 DNA replication, as well as to its possible role in phage genetic recombination.