Bacteriophage Phi29 codes for a protein (p16) that is required for viral DNA packaging both in vivo and in vitro. Co-expression of p16 with the chaperonins GroEL and GroES has allowed its purification in a soluble form. Purified p16 shows a weak ATPase activity that is stimulated by either DNA or RNA, irrespective of the presence of any other viral component. The stimulation of ATPase activity of p16, although induced under packaging conditions, is not dependent of the actual DNA packaging and in this respect the Phi29 enzyme is similar to other viral terminases. Protein p16 competes with DNA and RNA in the interaction with the viral prohead, which occurs through the N-terminal region of the connector protein (p10). In fact, p16 interacts in a nucleotide-dependent fashion with the viral Phi29-encoded RNA (pRNA) involved in DNA packaging, and this binding can be competed with DNA. Our results are consistent with a model for DNA translocation in which p16, bound and organized around the connector, acts as a power stroke to pump the DNA into the prohead, using the hydrolysis of ATP as an energy source.