Efficient initiation by the DNA polymerase of adenovirus type 2 requires nuclear factor I (NFI), a cellular sequence-specific transcription factor. Three functions of NFI--dimerization, DNA binding, and activation of DNA replication--are colocalized within the N-terminal portion of the protein. To define more precisely the role of NFI in viral DNA replication, a series of site-directed mutations within the N-terminal domain have been generated, thus allowing the separation of all three functions contained within this region. Impairment of the dimerization function prevents sequence-specific DNA binding and in turn abolishes the NFI-mediated activation of DNA replication. NFI DNA-binding activity, although necessary, is not sufficient to activate the initiation of adenovirus replication. A distinct class of NFI mutations that abolish the recruitment of the viral DNA polymerase to the origin also prevent the activation of replication. Thus, a direct interaction of NFI with the viral DNA polymerase complex is required to form a stable and active preinitiation complex on the origin and is responsible for the activation of replication by NFI.