The sequence-specific DNA-cleavage activity of calicheamicin g₁^I was studied using a synthetic 20mer DNA substrate that contains a single TCCT AGGA target site. The cleavage reaction was initiated by addition of þ-mercaptoethanol, which, under conditions of calicheamicin excess, results in burst kinetics. The burst amplitude was used to obtain a K_D value of 135 nM for the calicheamicin-DNA interaction. Calicheamicin and calicheamicin oligosaccharide were allowed to compete for binding, which provided a K_I value of 4.1 µM for the oligosaccharide-DNA interaction. Replacement of the iodo-substituted oligosaccharide by the corresponding bromo-, chloro-, fluoro-, methyl-, and hydrogen-substituted compounds resulted in progressively weaker binding. Replacement of guanine by inosine at the 5 '-most, but not the 3 '-most position within the AGGA target sequence resulted in greatly diminished DNA cleavage. These results suggest that for this target sequence there is a critical interaction between the iodine substitutent on the calicheamicin oligosaccharide and the 5 '-most guanine C2-NH₂ group within the minor groove of the target DNA.