Phosphodiesterase from calf spleen exhibits nucleotidyltransferase activity when incubated with either the (PR) or the (PS) diastereomer of thymidyl 3'-(4-nitrophenyl phosphorothioate). Thymidylyl(3'-5')thymidyl phosphorothioate 3'-(4-nitrophenyl phosphorothioate) was identified as the main product of the enzyme-catalyzed reaction and the absolute configuration at the internucleotide phosphorus atom of the product was determined. The nucleotidyltransferase reaction is shown to proceed with retention of configuration at phosphorus, implying involvement of a double displacement mechanism with the formation of a nucleotidylated enzyme intermediate. To study the substrate specificity of spleen phosphodiesterase a series of deoxyribonucleosidyl 3'-(4-nitrophenyl phosphates) and phosphorothioates were synthesized, and Km and V parameters for each substrate were measured. The results obtained show virtually no specificity for substrates with different nucleosidyl moieties, while about a 20 - 30-fold drop in V and a slight increase in Km values is observed for phosphorothioate analogues as compared with corresponding phosphates. The enzyme showed no significant stereoselectivity towards phosphorothioates of opposite configurations at phosphorus.