Terminase is an enzyme from bacteriophage lambda that is required for insertion of the viral genome into an empty pro-capsid. This enzyme is composed of the viral proteins gpNu1 (20.4 kDa) and gpA (73.3 kDa) in a holoenzyme complex. Current models for terminase assembly onto DNA suggest that gpNu1 binds to three repeating elements within a region of the lambda genome known as cosB which, in turn, stimulates the assembly of a gpA dimer at the cosN subsite. This prenicking complex is the first of several stable nucleoprotein intermediates required for DNA packaging. We have noted a hydrophobic region within the primary amino acid sequence of the terminase gpNu1 subunit and hypothesized that this region constitutes a protein-protein interaction domain required for cooperative assembly at cosB and that is also responsible for the observed aggregation behavior of the isolated protein. We therefore constructed a mutant of gpNu1 in which this hydrophobic "domain" has been deleted in order to test these hypotheses. The deletion mutant protein, gpNu1DeltaK, is fully soluble and, unlike full-length protein, shows no tendency toward aggregation; However, the protein is a dimer under all experimental conditions examined as determined by gel permeation and sedimentation equilibrium analysis. The truncated protein is folded with evidence of secondary and tertiary structural elements by circular dichroism and NMR spectroscopy. While physical and biological assays demonstrate that gpNu1DeltaK does not interact with the terminase gpA subunit, the deletion mutant binds with specificity to cos-containing DNA. We have thus constructed a deletion mutant of the phage lambda terminase gpNu1 subunit which constitutes a highly soluble DNA binding domain of the protein. We further propose that the hydrophobic amino acids found between Lys100 and Pro141 define a self-association domain that is required for the assembly of stable nucleoprotein packaging complexes and that the C-terminal tail of the protein defines a distinct gpA-binding site that is responsible for terminase holoenzyme formation.