The binding of bacteriophage T4 DNA polymerase (T4 pol) to primer-template DNA with 2-aminopurine (2AP) located at the primer terminus results in the formation of a hyperfluorescent 2AP state. Changes in this hyperfluorescent state were utilized to investigate the fractional concentration of primer-templates bound at the exonuclease and statically quenched polymerase sites. In the absence of Mg2+, a hydrophobic exonuclease site dominates over the polymerase site for possession of the primer terminus. The fractional concentration of primer termini in the exonuclease site was found to be 64 and 84% for correct (AP-T) and mismatched (AP-C) primer-templates, respectively. Exonuclease-deficient mutants, polymerase-switching mutants, and nucleoside triphosphates all shift this equilibrium toward the polymerase site. Synthesis of stereospecific hydrolysis resistant phosphorothioate 2AP-labeled DNA allowed Mg2+ ion binding titrations to be performed in the presence of bound DNA without the complication of the excision reaction. High- and low-affinity Mg2+ binding sites were observed in the presence of bound double-stranded (ds) DNA, with dissociation constants in the micromolar (WT Kd = 5.1 microM) and millimolar (WT Kd = 2.5 mM) concentration ranges. Mg2+ binding was found to be a key "conformational switch" for T4 pol. As the high-affinity Mg2+ binding sites are filled, the primer terminus migrates from the exonuclease site to a highly based stacked polymerase active site. Filling the low-affinity Mg2+ sites further shifts the primer terminus into the polymerase site. As the low-affinity Mg2+ sites are filled, T4 pol "loosens its grip" on the primer terminus, as shown by a large amplitude increase in the nanosecond rotational mobility of 2AP within the bound T4 complex. The hyperfluorescent exonuclease site is spatially localized to 2AP positioned on the primer end. The penultimate (n - 1) position, as well as n - 2 and n - 5 positions, reveals no detectable fluorescent enhancement upon binding. The observed position-dependent fluorescence data, when combined with time-resolved total-intensity and anisotropy data, suggest that the creation of the hyperfluorescent state is caused by phenylalanine 120 (F120) of T4 pol intercalating into 2AP primers much like that observed for phenylalanine 123 of RB69 DNA polymerase intercalating into deoxythymidine primers [Wang, J., et al. (1997) Cell 89, 1087-1099]. As Mg2+ binds in the exonuclease site of T4 pol, the primer terminus appears to be "pulled backward" into the active site, decreasing the concentration of F120-intercalated primer termini, and bringing the exonuclease active site residues closer to the primer terminus scissile phosphate bond.