The acyclic adenosine analogue (S)-9-(3-hydroxy-2-phosphonylmethoxypropyl)adenine [S]-HPMPA) is a potent and selective inhibitor of adenovirus (Ad) replication in cell culture. We studied the mechanism of inhibition using a reconstituted in vitro DNA replication system. The diphosphoryl derivative (S)-HPMPApp, but not (S)-HPMPA, inhibited the DNA replication of origin containing fragments strongly. The inhibitory effect was exerted at the level of elongation, while initiation was resistant to the drug. Remarkably, the elongation of short strands was only slightly impaired, while inhibition was maximal upon synthesis of long DNA fragments. (S)-HPMPApp appeared to be competitive with dATP, suggesting that the Ad DNA polymerase is the prime target for the drug. We purified the Ad DNA polymerase in complex to the precursor terminal protein to homogeneity from cells infected with overproducing recombinant vaccinia viruses. Employing gapped DNA or poly(dT).oligo(dA) templates, only a weak inhibition was observed. However, inhibition was strongly enhanced in the presence of the adenovirus DNA binding protein (DBP). We interpret this to mean that the increased processivity of the polymerization reaction in the presence of DBP leads to increased drug sensitivity.