The protein product of the rep gene of Escherichia coli is required for the replication of certain bacteriophage genomes (phi X174, fd, P2) and for the normal replication of E. coli DNA. We have used a specialized transducing phage, lambda p rep+, which complements the defect of rep mutants, to identify the rep protein. The rep protein has been purified from cells infected with lambda p rep+ phage; it has a molecular weight of about 70 000 and appears similar to the protein found in normal cells. Stimulation of phi X174 replicative form DNA synthesis in vitro was observed when highly purified rep protein was supplied to a cell extract derived from phi X-infected E. coli rep cells and supplemented with replicative form DNA. The purified protein has a single-stranded DNA-dependent ATPase activity and is capable of sensitizing duplex DNA to nucleases specific for single-stranded DNA. For this reason we propose the enzyme be called DNA helicase III. We infer that the rep protein uses the energy of hydrolysis of ATP to separate the strands of duplex DNA; the E. coli DNA binding protein need not be present. The rep3 mutant appeared to make a limited amount of active rep protein.