Terminases are enzymes common to all of the complex double-stranded DNA viruses and are required for viral assembly. These enzymes function to excise a single viral genome from a concatemeric DNA precursor and package it into a preformed protective protein shell or capsid. ATP hydrolysis by these enzymes has been described and appears to be critical to the packaging process. We have previously characterized the endonuclease activity of purified terminase from bacteriophage lambda [Tomka, M. A., & Catalano, C. E. (1993) J. Biol. Chem. 268, 3056-3065], and we describe here a kinetic characterization of the ATPase activity of the enzyme. Lambda terminase possesses a DNA-stimulated ATPase activity and hydrolyzes ATP to ADP and P(i). This activity requires divalent metal and is supported by all of the group IIa metals examined, as well as Mn2+. The reaction is also stimulated by NaCl, GTP, and dGTP. Of note is that neither of the guanosine nucleotides is hydrolyzed by the enzyme, while dATP is hydrolyzed at a rate comparable to that of ATP. Kinetic analysis of the ATPase activity revealed two apparent binding sites for ATP hydrolysis. The high-affinity site (K(m) = 5 muM) and low-affinity site (K(m) almost-equal-to 1.3 mM) hydrolyze ATP with k(cat) = 3 and 16 min-1, respectively. While the high-affinity site is unaffected by the presence of DNA, ATP hydrolysis at the low-affinity site is stimulated by DNA, which results from both a decrease in the K(m) and a concomitant increase in the k(cat) of the reaction. The implications of these results in the packaging of viral DNA by terminase enzymes are discussed.