Plasmids of the pT181 family encode initiator proteins that act as dimers during plasmid rolling circle (RC) replication. These initiator proteins bind to the origin of replication through a sequence-specific interaction and generate a nick at the origin that acts as the primer for RC replication. Previous studies have demonstrated that the initiator proteins contain separate DNA binding and nicking-closing domains, both of which are required for plasmid replication. The tyrosine residue at position 191 of the initiator RepC protein of pT181 is known to be involved in nicking at the origin. We have generated heterodimers of RepC that consist of different combinations of wild type, DNA binding, and nicking mutant monomers to identify the role of each of the two monomers in RC replication. One monomer with DNA binding activity was sufficient for the targeting of the initiator to the origin, and the presence of Tyr-191 in one monomer was sufficient for the initiation of replication. On the other hand, a dimer consisting of one monomer defective in DNA binding and the other defective in origin nicking failed to initiate replication. Our results demonstrate that the monomer that promotes sequence-specific binding to the origin must also nick the DNA to initiate replication. Interestingly, whereas Tyr-191 of the initiator was required for nicking at the origin to initiate replication, it was dispensable for termination, suggesting that alternate amino acids in the initiator may promote termination but not initiation.