The primase fragment of the bacteriophage T7 63-kDa gene 4 helicase/primase protein contains the 271 N-terminal amino acid residues and lacks helicase activity. The primase fragment catalyzes the synthesis of oligoribonucleotides at rates similar to those catalyzed by the full-length protein in the presence of a 5-nucleotide DNA template containing a primase recognition site (5'-GGGTC-3', 5'-TGGTC-3', 5'-GTGTC-3', or 5'-TTGTC-3'). Although it is not copied into the oligoribonucleotides, the cytosine at the 3'-position is essential for synthesis and template binding. Two nucleotides flanking the 3'-end of the recognition site are required for tight DNA binding and rapid oligoribonucleotide synthesis. Nucleotides added to the 5'-end have no effect on the rate of oligoribonucleotide synthesis or the affinity of the primase for DNA, The binding of either ATP or CTP significantly increases the affinity of the primase for its DNA template. DNA lacking a primase recognition site does not inhibit oligoribonucleotide synthesis, suggesting that the primase binds DNA in a sequence-specific manner. The affinity of the primase for templates is weak, ranging from 10 to 150 mu M. The tight DNA binding (<1 mu M) observed with the 63-kDa gene 4 protein occurs via interactions between DNA templates and the helicase domain.