Potential DNA contacts involved in the specific interaction between the Escherichia coli MutY protein and a 40-mer oligonucleotide containing an A/G mismatch have been examined by alkylation interference techniques. Ethylation interference patterns suggest that more than five phosphates are involved in electrostatic interactions between MutY and DNA. Interestingly, MutY has more contacts on the G-strand than on the A-strand. Methylation at both the N-7 position of the mismatched G and the N-3 position of the mispaired A interfere with MutY binding. In addition to these mismatched bases, MutY also contacts purines on both sides of the mismatch. Binding and endonuclease activities of MutY were assayed with 20-mer oligonucleotides containing A/G, A/C, A/7,8-dihydro-8-oxo-guanine (A/GO), A/inosine (A/I), A/2-aminopurine (A/2AP), nebularine/G (N/G), inosine/G (I/G), 2AP/G, and 7-deaza-adenosine/G (Z/G) mispairs. The C-8 keto group of GO in A/GO contributes to a much tighter binding but weaker endonuclease activity than is seen with A/G. Because A/I is not specifically well recognized by MutY, the 2-amino group of G in A/G is essential for recognition. The C-6 keto group present in A/G but absent in A/2AP is also important for recognition. The 6-amino group of adenine appears not to be required for either binding or endonuclease activity because N/G is as good a substrate as A/G. The 2AP/G mispair is bound and cleaved weaker than is the A/G mispair. Binding and endonuclease activities are abolished when the N-7 group of A is replaced by C-7 as in the Z/G mispair. When a C-6 keto group is present as in the I/G pair, its binding by MutY is as good as for A/G, but no endonuclease activity is observed. Taken together, our data suggest that DNA sequences proximal to and specific functional groups of mismatched bases are necessary for recognition and catalysis by MutY protein.