BACKGROUND Tn3, a bacterial transposon, carries tnpA gene encoding transposase which is essential for its transposition. The transposition of Tn3 has been reproduced in vitro in a cell extract containing transposase by using a plasmid carrying mini-Tn3 as the donor and another plasmid as the target. Transposase has the ability to bind to the 38-bp terminal inverted repeats (IRs) of Tn3. The molecular mechanism of the initiation step of the Tn3 transposition reaction promoted by the transposase has, however, not been understood. RESULTS We found that nicking occurred efficiently in the cell-free system at each of the 3' ends of the IRs of mini-Tn3 in the closed circular or linear donor molecules. The nicking reaction required transposase and Mg2+, but did not require ATP, an ATP-regenerating system, dNTPs and polyvinyl alcohol, which were the requirements for the transposition reaction. By using the nicking assay employed here, transposase was purified almost to homogeneity. Gel filtration and sedimentation analyses indicate that transposase forms a dimer in a solution containing 0.5 M NaCl. The nicking activity of the purified transposase was weak and was found to be stimulated by a host factor. The nicking stimulation factor was subsequently purified and found to be ACP, an Escherichia coli acyl carrier protein. CONCLUSIONS Nicking occurred efficiently at the 3' ends of mini-Tn3 in the reaction mixture containing transposase and ACP. ACP is known to act as a factor which modulates enzymes that are involved in several biological processes either in the acylated or unacylated form. ACP may also modulate transposase to initiate the transposition reaction with nicking at the 3' ends of Tn3.