The role of Mg2+ in dTTP hydrolysis, dTTP binding, hexamer formation, and DNA binding was studied in bacteriophage T7 DNA helicase (4A' protein). The steady state kcat for the dTTPase activity was 200-300-fold lower in the absence of MgCl2, but the Km was only slightly affected. Direct dTTP binding experiments showed that the Kd of dTTP was unaffected, but the stoichiometry of dTTP binding was different in the absence of Mg2+. Two dTTPs were found to bind tightly in the absence of Mg2+ in contrast to three to four in the presence of Mg2+. In the presence of DNA there was little difference in the stoichiometry of dTTP binding to 4A'. These results indicate that Mg2+ is not necessary for dTTP binding, but Mg2+ is required for optimal hydrolysis of dTTP. Gel filtration of 4A' in the presence of dTTP without Mg2+ showed that Mg2+ was not necessary, and dTTP was sufficient for hexamer formation. The hexamers formed in the presence of dTTP without Mg2+ were capable of binding single-stranded DNA. However, the 4A' hexamers formed in the presence of dTDP with or without Mg2+ did not bind DNA, indicating that hexamer formation itself is not sufficient for DNA binding. The hexamers need to be in the correct conformation, in this case in the dTTP-bound state, to interact with the DNA. Thus, the gamma-phosphate of dTTP plays an important role in causing a conformational change in the protein that leads to stable interactions of 4A' with the DNA.