The VirD1 and VirD2 proteins encoded by an inducible locus of the virulence (vir) region of the Agrobacterium tumefaciens Ti plasmid are required for site-specific nicking at T-DNA border sites. We have determined the nucleotide sequence of a 3.6-kilobase-pair fragment carrying the virD locus from nopaline Ti plasmid pTiC58. In contrast to the previous report (Hagiya et al., Proc. Natl. Acad. Sci. USA 82:2669-2673, 1985), we found that the first three open reading frames were capable of encoding polypeptides of 16.1, 49.7, and 21.4 kilodaltons. Deletion analysis demonstrated that the N-terminal conserved domain of VirD2 was absolutely essential for its endonuclease activity. When extra copies of the virD1 and virD2 genes were present in an A. tumefaciens strain carrying a Ti plasmid, increased amounts of T-strand and nicked molecules could be detected at early stages of vir induction. Such strains possessed the ability to transform plants with higher efficiency.