The initiation of DNA chains by the 80-kilodalton form of the adenovirus terminal protein has been studied. This protein, which can be covalently linked to dCMP, is isolated complexed to a 140-kilodalton protein possessing DNA polymerase activity. In the presence of adenovirus DNA-protein, the formation of the 80-kilodalton protein-dCMP complex requires the addition of ATP and nuclear extract from uninfected cells in addition to Mg2+ and dCTP. When single-stranded DNA is used in place of the adenovirus DNA-protein, the formation of the 80-kilodalton protein-dCMP complex occurs in the absence of ATP and nuclear extract. In the presence of the four dNTPs, the complex yields DNA chains of various sizes between 100 and 300 nucleotides. The products formed with bacteriophage phi X174 single-stranded circular DNA as the template are site specific, predominantly derived from the sequences between nucleotides 2363 and 2977 and between nucleotides 3760 and 4206. These small dNA chains are blocked at their 5' ends with the 80-kilodalton protein but possess free 3'-OH ends that are susceptible to degradation by exonuclease III and can be elongated to replicative form II products with DNA polymerase I of Escherichia coli or eukaryotic DNA polymerase beta preparations. A protein priming model explaining the different requirements for initiation with adenovirus DNA-protein and with phi X174 DNA is presented.