The mobility of maize transposable element Activator (Ac) is dependent on the 11-bp terminal inverted repeats (IRs) and approximately 250 subterminal nucleotides at each end. These sequences flank the coding region for the transposase (TPase) protein, which is required for the transposition reaction. Here we show that Ac TPase has a bipartite DNA binding domain, and recognizes the IRs and subterminal sequences in the Ac ends. TPase binds cooperatively to repetitive ACG and TCG sequences, of which 25 copies are found in the 5' and 20 copies in the 3' subterminal regions. TPase affinity is highest when these sites are flanked on the 3' side by an additional G residue (A/TCGG), which is found at 75% of binding sites. Moreover, TPase binds specifically to the Ac IRs, albeit with much lower affinity. Two mutations within the IRs that immobilize Ac abolish TPase binding completely. The basic DNA binding domain of TPase is split into two subdomains. Binding to the subterminal motifs is accomplished by the C-terminal subdomain alone, whereas recognition of the IRs requires the N-terminal subdomain in addition. Furthermore, TPase is extremely flexible in DNA binding. Two direct or inverted binding sites are bound equally well, and sites that are five to twelve bases apart are similarly well bound. The consequences of these findings for the Ac transposition reaction are discussed.