Bacteriophage T7 DNA helicase requires two noncomplementary single-stranded DNA (ssDNA) tails next to a double-stranded DNA (dsDNA) region to initiate DNA unwinding. The interactions of the helicase with the DNA were investigated using a series of forked DNAs. Our results show that the helicase interacts asymmetrically with the two tails of the forked DNA. When the helicase was preassembled on the forked DNA before the start of unwinding, a DNA with 15-nucleotide (nt) 3'-tail and 35-nt 5'-tail was unwound with optimal rates close to 60 base pairs/s at 18 degrees C. When the helicase was not preassembled on the DNA, a >65-nt long 5'-tail was required for maximal unwinding rates of 12 base pairs/s. We show that the helicase interacts specifically with the ssDNA region and maintains contact with both ssDNA strands during DNA unwinding, since conversion of the two ssDNA tails to dsDNA structures greatly inhibited unwinding, and the helicase was unable to unwind past a nick in the dsDNA region. These studies have provided new insights into the mechanism of DNA unwinding. We propose an exclusion model of DNA unwinding in which T7 helicase hexamer interacts mainly with the ssDNA strands during DNA unwinding, encircling the 5'-strand and excluding the 3'-strand from the hole.