Bacteriophage T7-induced DNA polymerase is composed of a 1:1 complex of phage-induced gene 5 protein and Escherichia coli thioredoxin. Preparation of active subunits in the absence of sulfhydryl reagents indicates the reduced form of thioredoxin is sufficient for formation of the active holoenzyme. The oxidized form of thioredoxin, thioredoxin modified at one active site sulfhydryl by iodoacetate or methyl iodide, or thioredoxin modified at both active site sulfhydryls by N-ethylmaleimide, are all inactive, being defective in complex formation with gene 5 protein. Thioredoxin sulfhydryl groups present in native T7 DNA polymerase do not appear to be involved in an intersubunit disulfide bond; one and probably both sulfhydryls are available in the native holoenzyme for modification by N-ethylmaleimide. Furthermore, DNA substrates alter the reactivity of thioredoxin cysteines within the holoenzyme with respect to this reagent. Substrates for the single strand exonuclease enhance the reactivity of thioredoxin sulfhydryl groups while those for the polymerase or double strand exonuclease functions afford protection. It, therefore, seems likely that thioredoxin sulfhydryl groups are present in the reduced state within the native polymerase.