Escherichia coli encodes a dGTP triphosphohydrolase (dGTPase) that cleaves dGTP to deoxyguanosine and tripolyphosphate. dGTP is hydrolyzed with a Michaelis constant (Km) of 5 microM and a maximal velocity (Vmax) of 1.8 mumols/min/mg. The ribonucleotide GTP is a poor substrate with a much lower affinity. It is hydrolyzed with a Km of 150 microM and Vmax of 0.07 mumols/min/mg. Bacteriophage T7 encodes a specific inhibitor of dGTPase, the gene 1.2 protein, that forms a tight complex with the enzyme. The enzyme-inhibitor complex binds dGTP with a dissociation constant (KD) of 1.5 microM, but the bound dGTP is not hydrolyzed. It remains stably bound to the complex with a half-life of approximately 5 min. In contrast, dGTP is unable to bind to gene 1.2 protein alone, and dGTP bound to dGTPase alone is quickly hydrolyzed and released. Surprisingly, the dGTPase-gene 1.2 protein complex has a higher affinity for GTP than for dGTP. GTP is stably bound to the dGTPase-gene 1.2 protein complex with a half-life greater than 30 min and KD of 0.8 microM; GTP is not stably bound to either dGTPase or gene 1.2 protein alone. Both GTP and dGTP bind to and stabilize the dGTPase-gene 1.2 protein complex, inhibiting its dissociation. Although the presence of dGTP induces conformation changes in dGTPase so that it is unable to associate with the gene 1.2 protein, saturating concentrations of GTP have no such effect. The enzyme efficiently associates with its inhibitor in the presence of GTP. These results indicate that E. coli dGTPase and gene 1.2 protein interact to form a high affinity GTP-binding site. dGTP is most effective in preventing the association of the enzyme with the inhibitor whereas GTP is most effective in preventing the dissociation of the enzyme-inhibitor complex.