The bacteriophage phi X174 gene A encodes two proteins: gene A protein and A* protein. Purified A* protein acts as a single-stranded, DNA-specific endonuclease which remains covalently attached to the 5'-end of the cleavage site. Incubation of A* protein with the synthetic heptamer CAACTTG or with oligonucleotides which yield this heptamer after cleavage with the A* protein yields oligonucleotides with the sequences CAACTTGAG, CAACTTGAGG and CAACTTGAGGA. This indicates that A* protein carries an oligonucleotide with the sequence--AG, -AGG or -AGGA. The oligonucleotide can be transferred to the 3'-end of the heptamer CAACTTG. This suggests that A* protein reacts with a specific DNA sequence in the infected cell.