Neocarzinostatin inhibits DNA synthesis in HeLa S3 cells and induces the rapid limited breakage of cellular DNA. The fragmentation of cellular DNA appears to precede the inhibition of DNA synthesis. Cells treated with drug at 37 degrees C for 10 min and then washed free of drug show similar levels of inhibition of DNA synthesis or cell growth, or of strand-scission of DNA as when cells were not washed. If cells are preincubated with neocarzinostatin at 0 degrees C before washing, the subsequent incubation of 37 degrees C results in no inhibition of DNA synthesis or cell growth, or cutting of DNA. Isolated nuclei or cell lysates derived from neocarzinostatin-treated HeLa S3 cells are inhibited in DNA synthesis but this can be overcome in cell lysates by adding activated DNA. A cytoplasmic fraction from drug-treated cells can stimulate DNA synthesis by nuclei isolated from untreated cells, whereas nuclei from drug-treated cells are not stimulated by the cytoplasmic fraction from untreated cells. By contrast, neocarzinostatin does not inhibit DNA synthesis when incubated with isolated nuclei, but it can be shown that under these conditions the DNA is already degraded and is not further fragmented by the drug. These data suggest that the drug's ability to induce breakage of cellular DNA in HeLa S3 cells is an essential aspect of its inhibition of DNA replication and may be responsible for the cytotoxic and growth-inhibiting actions of neocarzinostatin.