Ribonuclease H (RNase H) recognizes a DNA-RNA hybrid duplex and catalyzes the hydrolysis of the phosphodiester linkages in only the RNA strand. Previously, we developed a method to cleave RNA in a sequence-dependent manner using RNase H and a complementary oligonucleotide containing 2'-O-methylribonucleosides. Since cleavage is restricted to a single site by the modified complementary strand, this system allows kinetic analysis of the RNase H reaction. We describe an investigation of the interactions between RNase HI from Escherichia coli and its substrate, and between the substrate and a metal ion using synthetic oligonucleotide duplexes modified at the cleavage site in combination with the 2'-O-methylribonucleotides. Firstly, the base moiety was changed to interfere with enzyme binding in either the major or minor groove. When 2-N-methylguanine was incorporated into the cleavage site, the Km value for this substrate, containing a methyl group in the minor groove, was 20-fold larger than that for the unmodified substrate, whereas 5-phenyluracil, with a phenyl group residing in the major groove of the duplex, did not affect the affinity. Secondly, the phosphodiester linkage at the cleavage site was changed into a phosphorothioate with a defined configuration. Only the Rp isomer was cleaved at this site in the presence of Mg2+ or Cd2+. These results suggest that the enzyme, but not the metal ion, interacts with the phosphate residue at the cleavage site. Thirdly, the 2'-position of the nucleoside on the 5'-side of the scissile phosphodiester was modified. Alteration of the 2'-hydroxyl function into an amino, fluoro or methoxy group, or removal of this 2'-hydroxyl group, did not affect the affinity for the enzyme, but reduced the reaction rate. An outer sphere interaction of a metal ion with the 2'-hydroxyl group is suggested.