The bacteriophage phi 29 DNA polymerase, involved both in the protein-primed initiation and elongation steps of the viral DNA replication, displays a very processive 3',5'-exonuclease activity acting preferentially on single-stranded DNA. This exonucleolytic activity showed a marked preference for excision of a mismatched versus a correctly paired 3' terminus. These characteristics enable the phi 29 DNA polymerase to act as a proofreading enzyme. A comparative analysis of the wild-type phi 29 DNA polymerase and a mutant lacking 3',5'-exonuclease activity indicated that a productive coupling between the exonuclease and polymerase activities is necessary to prevent fixation of polymerization errors. Based on these data, the phi 29 DNA polymerase, a model enzyme for protein-primed DNA replication, appears to share the same mechanism for the editing function as that first proposed for T4 DNA polymerase and Escherichia coli DNA polymerase I on the basis of functional and structural studies.