In order to improve our understanding of the 5'-3' exonuclease reaction catalyzed by Escherichia coli DNA polymerase I, we have constructed expression plasmids and developed purification methods for whole DNA polymerase I and its 5'-3' exonuclease domain that allow the production of large quantities of highly purified material suitable for biophysical and other studies. We have studied the enzymatic properties of the 5'-3' exonuclease, both as an isolated domain and in the context of the whole polymerase, using a variety of model oligonucleotides to explore the enzyme-substrate interaction. The 5'-3' exonuclease is known to be a structure-specific nuclease that cleaves a 5' displaced strand at the junction between single-stranded and duplex regions. Since the isolated domain shows the same structure specificity as the whole polymerase, the correct geometry of substrate binding is achieved without the assistance of the polymerase domain. The 5'-3' exonuclease reaction has a strict requirement for a free 5' end on the displaced strand; however, the upstream template and primer strands are dispensable. Site-directed mutagenesis of the ten carboxylate residues that are highly conserved among bacterial and bacteriophage 5'-3' exonucleases indicates that nine of them are important in the reaction. This finding is discussed in relation to structural and mutational data for related 5' nucleases.