The tau subunit of Escherichia coli DNA polymerase III holoenzyme interacts with the a subunit through its C- terminal Domain V, tau(C)16. We show that the extreme C- terminal region of tau(C)16 constitutes the site of interaction with a. The tau(C)16 domain, but not a derivative of it with a C- terminal deletion of seven residues ( tau(C)16 Delta 7), forms an isolable complex with a. Surface plasmon resonance measurements were used to determine the dissociation constant ( K-D) of the alpha-tau(C)16 complex to be similar to 260 pM. Competition with immobilized tau(C)16 by tau(C)16 derivatives for binding to a gave values of K-D of 7 mu M for the alpha-tau(C)16 Delta 7 complex. Low-level expression of the genes encoding tau(C)16 and tau(C)16 Delta 7, but not tau(C)16 Delta 11, is lethal to E. coli. Suppression of this lethal phenotype enabled selection of mutations in the 3' end of the tau(C)16 gene, that led to defects in a binding. The data suggest that the unstructured alpha terminus of tau becomes folded into a helix - loop - helix in its complex with alpha. An N- terminally extended construct, tau(C)24, was found to bind DNA in a salt- sensitive manner while no binding was observed for tau(C)16, suggesting that the processivity switch of the replisome functionally involves Domain IV of tau.