Formation of relaxosomes is the first step in the initiation of transfer DNA replication during bacterial conjugation. This nucleoprotein complex contains all components capable of introducing a site- and strand-specific nick at a cognate transfer origin (oriT) on supercoiled plasmid DNA, thus providing the substrate for generation of the strand to be transferred. Characterization of the terminal nucleotides at the oriT nick site revealed that relaxation occurs by hydrolysis of a single phosphodiester bond between a 2'-deoxyguanosyl and a 2'-deoxycytidyl residue. The relaxation nick site and a 19-base pair invert repeat sequence that is recognized by asymmetric binding of the RP4 TraJ protein are interspaced by 8 base pairs. The nicking reaction results in covalent attachment of the RP4 TraI protein to the 5'-terminal 2'-deoxycytidyl residue of the cleaved strand. The arrangement of the TraJ binding site and the relaxation nick site on the same side of the DNA double helix suggests that protein-protein interactions between TraJ and TraI are a prerequisite for oriT specific nicking. In accordance with the current model of transfer DNA replication, the 3' end remains accessible for primer extension by DNA polymerase I, enabling replacement strand synthesis in the donor cell by a rolling circle-type mechanism.