Nuclear factor I is a 47-kd protein, isolated from nuclei of HeLa cells, that binds specifically to the inverted terminal repeat of the adenovirus (Ad) DNA and enhances Ad DNA replication in vitro. We have studied the DNA sequence specificity of nuclear factor I binding using cloned terminal fragments of the Ad2 genome and a set of deletion mutants. Binding of nuclear factor I protects nucleotides 19-42 of Ad2 DNA against DNase I digestion. Filter binding assays show that deletion of the first 23 nucleotides does not impair binding while a deletion of 24 nucleotides reduces binding severely. However, binding studies on Ad12 DNA indicate that nucleotide 24 can be mutated. Fragments containing the first 40 bp are bound normally while the first 38 bp are insufficient to sustain binding. Taken together, these results indicate that the minimal recognition site of nuclear factor I contains 15 or 16 nucleotides, located from nucleotide 25 to nucleotide 39 or 40 of the Ad2 DNA. This site contains two of the four conserved nucleotide sequences in this region. Sequences flanking the minimal recognition site may reduce the binding affinity of nuclear factor I. In accordance with these binding studies, DNA replication of a fragment that carries the sequence of the terminal 40 nucleotides of Ad2 at one molecular end is enhanced by nuclear factor I in an in vitro replication system.