The deoxyribonuclease specified by the recB and recC genes of Escherichia coli (recBC DNase; exonuclease V) has been purified to near homogeneity by a new procedure. Although hydrolysis of even a single nucleotide from a duplex DNA molecule by the pure enzyme is absolutely dependent upon ATP, the extent of phosphodiester hydrolysis is strongly inhibited by ATP concentrations of 0.2 mm or greater, and the initial rate is unaffected. Under these conditions, the extent of DNA hydrolysis is proportional to enzyme concentration. In contrast, neither the rate nor the extent of hydrolysis of single-stranded DNA nor ATP is affected by high concentrations of ATP. The amount of large single-stranded polynucleotide generated by the action of the recBC DNase increases as the ATP concentration increases and, at 0.5 mM ATP, becomes equivalent to the amount of acid-soluble nucleotide formed. These findings suggest that high intracellular concentrations of ATP affect the mechanism of the recBC DNase so as to limit the extent of hydrolysis of duplex DNA, while at the same time favoring the formation of single-stranded regions within the duplex. Such regions may be essential intermediates in the recombination process.