The DNA polymerase induced by bacteriophage T7 can be isolated in two different forms. The distinguishing properties are: 1) the specific activities of the associated 3' to 5' single- and double-stranded DNA exonuclease activities, 2) the ability to catalyze DNA synthesis and strand displacement at nicks, and 3) the degree of stimulation of DNA synthesis on nicked, duplex DNAs by the gene 4 protein of phage T7. Form I is obtained when purification is carried out in the absence of EDTA while Form II is obtained if all purification steps are carried out in the presence of 0.1 mM EDTA. Form I has low levels of both exonuclease activities, less than 5% of those of Form II. Form I can initiate DNA synthesis at nicks leading to strand displacement, a consequence of which is its ability to be stimulated manyfold by the helicase activity of gene 4 protein on nicked, duplex templates. On the other hand, Form II cannot initiate synthesis at nicks even in the presence of gene 4 protein. In keeping with its higher exonuclease activities, Form II of T7 DNA polymerase has higher turnover of nucleotides activity (5-fold higher than Form I) and exhibits greater fidelity of nucleotide incorporation, as indicated by the rate of incorporation of 2-aminopurine deoxynucleoside monophosphate. Both forms of T7 DNA polymerase exhibit higher fidelity of nucleotide incorporation than bacteriophage T4 DNA polymerase. In the absence of EDTA or in the presence of FeSO4 or CaCl2, Form II irreversibly converts to Form I. The physical difference between the two forms is not known. No difference in molecular weight can be detected between the corresponding subunits of each form of T7 DNA polymerase as measured by gel electrophoresis in the presence of sodium dodecyl sulfate.