Bacteriophage T7 DNA polymerase, the product of gene 5 of the phage, has both polymerase and single-and double-stranded DNA 3'-to 5'-exonuclease activities. The exonuclease activities can be inactivated selectively by an oxidation reaction that requires molecular oxygen, a reducing agent, and iron at a concentration less than or equimolar to that of the gene 5 protein. Both exonuclease activities can be diminished by several thousandfold, with only a small decline in the polymerase activity. Escherichia coli thioredoxin, an accessory protein that binds tightly to the gene 5 protein and increases the processivity of the polymerization reaction, has no effect on the rate of oxidation. We propose that iron binds specifically to the exonuclease domain and, in the presence of molecular oxygen and a reducing agent, generates reactive oxygen species that selectively modify amino acid residues essential for the exonuclease activities.