A 44 kDa C-terminal fragment of phi 29 DNA polymerase has been separately expressed and purified from Escherichia coli cells. As expected, the truncated protein lacked the 3'-5' exonuclease activity and strand-displacement capacity, previously mapped in the N-terminal domain of phi 29 DNA polymerase. On the other hand, the 44 kDa C-terminal fragment retained polymerase activity when using Mn2+ as metal activator, although the catalytic efficiency was greatly reduced with respect to that of the complete enzyme. Moreover, and in contrast to the high processivity exhibited by phi 29 DNA polymerase (> 70 kb), polymerization by its C-terminal domain was completely distributive. All these polymerization defects were related to a strong impairment of DNA binding, suggesting that additional contacts present in the N-terminal domain are important for an optimal stabilization and translocation of the DNA during polymerization. Moreover, the C-terminal domain showed a very reduced capacity to initiate terminal protein (TP)-primed DNA replication, as a consequence of a weakened interaction with the TP primer, and a lack of activation by protein p6, the initiator of phi 29 DNA replication. We conclude that the C-terminal portion of phi 29 DNA polymerase (residues 188 to 575), although having a structural entity as the domain responsible for the synthetic activities, requires the N-terminal domain to provide important contacts for the two different substrates, DNA and TP, that prime DNA synthesis. These results support the hypothesis of a modular organization of enzymatic activities in DNA-dependent DNA polymerases, but emphasize the functional coordination required for coupling DNA synthesis and proofreading, and for the more specific functions (TP-priming, high processivity and strand-displacement) inherent to phi 29 DNA polymerase.