Unmethylated CpG dinucleotides in particular base contexts (CpG-S motifs) are relatively common in bacterial DNA but are rare in vertebrate DNA. B cells and monocytes have the ability to detect such CpG-S motifs that trigger innate immune defenses with production of Th1-like cytokines. Despite comparable levels of unmethylated CpG dinucleotides, DNA from serotype 12 adenovirus is immune-stimulatory, but serotype 2 is nonstimulatory and can even inhibit activation by bacterial DNA. In type 12 genomes, the distribution of CpG-flanking bases is similar to that predicted by chance. However, in type 2 adenoviral DNA the immune stimulatory CpG-S motifs are outnumbered by a 15- to 30-fold excess of CpG dinucleotides in clusters of direct repeats or with a C on the 5' side or a G on the 3' side. Synthetic oligodeoxynucleotides containing these putative neutralizing (CpG-N) motifs block immune activation by CpG-S motifs in vitro and in vivo. Eliminating 52 of the 134 CpG-N motifs present in a DNA vaccine markedly enhanced its Th1-like function in vivo, which was increased further by the addition of CpG-S motifs. Thus, depending on the CpG motif, prokaryotic DNA can be either immune-stimulatory or neutralizing. These results have important implications for understanding microbial pathogenesis and molecular evolution and for the clinical development of DNA vaccines and gene therapy vectors.