We have detected, in nuclear extracts of non-infected cultured monkey cells, a protein (protein H16) that binds a specific single-stranded DNA sequence in the early promoter of simian virus 40 (SV40). This protein does not bind double-stranded DNA, nor RNA. In the present paper, the DNA-binding properties of protein H16 and its effects on transcription by RNA polymerase II in vitro have been investigated. The protein binds only to the late strand of the early promoter, within the region of the 21 base-pair repeats, and shows no affinity for any other SV40 sequence. The high percentage of cytosine residues in the late strand in this region appears to be important for recognition by the protein. Protein H16 does not bind the control region of SV40 in negatively supercoiled DNA circles. When bound to the late strand, the protein is displaced from its binding site by reassociation of the early strand with the late strand. Its binding to DNA is not sensitive to methylation of the dinucleotide CG in its binding site. The protein has been purified to near homogeneity by preparative gel retardation, and has an apparent molecular weight of 70,000. Purified protein H16 stimulates transcription by purified RNA polymerase II in vitro. The possible role of sequence-specific single-strand-binding proteins in transcription is discussed.