Phage Phi 29 regulatory protein p4 activates transcription from the late A3 promoter by stabilizing sigma(A)-RNA polymerase at the promoter as a closed complex. Activation requires interaction between both proteins, Protein p4 bends the DNA upon binding, We have performed a detailed mutagenesis study of the carboxyl end of the protein, which is involved in both transcription activation and DNA bending, The results indicate that Arg-120 is the most critical residue for activation, probably mediating the interaction with RNA polymerase. Several basic residues have been identified, including Arg-120, that contribute to maintenance of the DNA bending, probably via electrostatic interactions with the DNA backbone. The degree or stability of the induced bend apparently relies on the additive contribution of all basic residues of the carboxyl end of the protein. Therefore, the activation and DNA bending surfaces overlap, and Arg-120 should interact with both DNA and RNA polymerase. As we show that protein p4 is a dimer in solution, and is bound to DNA as a tetramer, the results suggest a model in which two of the p4 subunits interact with the DNA, bending it, while the other two subunits remain accessible to interact with RNA polymerase.