We report the production, purification, and characterization of a type IA DNA topoisomerase, previously designated topoisomerase I, from the hyperthermophilic archaeon Sulfolobus solfataricus. The protein was capable of relaxing negatively supercoiled DNA at 75 degrees C in the presence of Mg2+. Mutation of the putative active site Tyr318 to Phe318 led to the inactivation of the protein. The S. solfataricus enzyme cleaved oligonucleotides in a sequence-specific fashion. The cleavage occurred only in the presence of a divalent cation, preferably Mg2+. The cofactor requirement of the enzyme was partially satisfied by Cu2+, Co2+, Mn2+, Ca2+, or Ni2+. It appears that the enzyme is active with a broader spectrum of metal cofactors in DNA cleavage than in DNA relaxation (Mg2+ and Ca2+). The enzyme-catalyzed oligonucleotide cleavage required at least 7 bases upstream and 2 bases downstream of the cleavage site. Analysis of cleavage by the S. solfataricus enzyme on a set of oligonucleotides revealed a consensus cleavage sequence of the enzyme: 5'-G(A/T)CA(T)AG(T)G(A)X / XX-3'. This sequence bears more resemblance to the preferred cleavage sites of topoisomerases III than to those of topoisomerases I. Based on these data and sequence analysis, we designate the enzyme S. solfataricus topoisomerase III.