Most, if not all, of the DNA polymerase alpha activity in monkey and human cells was complexed with at least two proteins, C1 and C2, that together stimulated the activity of this enzyme from 180- to 1800-fold on low concentrations of denatured DNA, parvovirus DNA, M13, and phi X174 DNA or RNA-primed DNA templates, and poly(dT):oligo(dA) or oligo(rA). These primer-template combinations, which have from 200 to 5000 bases of template/primer, were then 7- to 50-fold more effective as substrates than DNase I-activated DNA. C1C2 specifically stimulated alpha polymerase, and only from the same cell type. Alpha X C1C2-polymerase reconstituted from purified alpha polymerase and the C1C2 cofactor complex behaved the same as native alpha X C1C2-polymerase and C1C2 had no effect on the sensitivity of alpha polymerase to aphidicolin, dideoxythymidine triphosphate, and N-ethylmaleimide. In the presence of substrates with a high ratio of single-stranded DNA template to either DNA or RNA primar, C1C2 increased the rate of DNA synthesis by decreasing the Km for the DNA substrate, decreasing the Km for the primer itself, increasing the use of shorter primers, and stimulating incorporation of the first deoxyribonucleotide. In contrast, C1C2 had no effect on the Km values for deoxyribonucleotide substrates (which were about 150-fold higher than for DNA replication in isolated nuclei), the ability of specific DNA sequences to arrest alpha polymerase, or the processivity of alpha polymerase. Accordingly, C1C2 function as primer recognition proteins. However, C1C2 did not reduce the comparatively high Km values or stimulate DNA synthesis by alpha polymerase on lambda DNA ends and DNase I-activated DNA, substrates with 12 and about 30-70 bases of template/primer, respectively. DNA restriction fragments with 1 to 4 bases of template/primer were substrates for neither alpha nor alpha X C1C2-polymerase. Therefore, we propose that C1C2 enhances the ability of alpha polymerase to initiate DNA synthesis by eliminating nonproductive binding of the enzyme to single-stranded DNA, allowing it to slide along the template until it recognizes a primer.