According to earlier genetic experiments, a region within the N-terminal 50-100 amino acids may be important for the replication function of T antigen, the initiator protein of simian virus 40 (SV40). We have investigated this possibility using the T antigen related D2 protein in several biochemical assay systems. D2 protein, a phosphoprotein coded for by the adeno-SV40 hybrid virus Ad2+D2, shares its 594 C-terminal amino acids with authentic T antigen and its 104 N-terminal amino acids with an adenovirus structural protein. We confirmed earlier studies showing that D2 protein appeared to bind well to specific binding sites in the SV40 origin of replication. We found, however, that D2 protein was rather inefficient, inducing the unwinding of the double-stranded origin region, and was much less active than authentic T antigen as an initiator of in vitro SV40 DNA replication. We interpret these findings to indicate that D2 protein molecules associate with the origin to form an aberrant complex that is quite inefficient, inducing DNA unwinding and the establishment of replication forks. The possibility that the N-terminus may be required for an optimal arrangement of T antigen at the origin was supported by results of dephosphorylation studies. Dephosphorylation of N-terminal phosphoamino acids had significant effects on the stability of D2 protein-origin complexes.