The primary site of action for the novel antibiotic, bicyclomycin, in Escherichia coli has been identified to be the rho transcription termination factor. The inhibition of rho poly(C)-stimulated hydrolysis of ATP by bicyclomycin has been found to proceed by a non-competitive, reversible pathway with respect to ATP (Ki = 20 microM). Inhibition by dihydrobicyclomycin was similar (Ki = 75 microM). No change in the inhibitory properties of the antibiotic was observed under the assay conditions with the two rho mutants, Cys202Gly and Cys202Ser, indicating that Cys-202 does not affect drug binding to rho. Prolonged incubation (32 degrees C, 12 h) of wild-type rho with bicyclomycin (20 mM) led to protein degradation and a slow, permanent loss of rho ATPase activity after dialysis. Evidence was obtained that trace amounts of proteases present with bicyclomycin were responsible for the observed protein degradation. Treatment of wild-type and mutant rho proteins with purified bicyclomycin (25 mM) led to approximately 80% loss of ATPase activity after dialysis with no apparent loss of protein. However, a reduction of the electrophoretic mobility of the bicyclomycin-treated rho versus wild-type rho was seen. Addition of either ATP or poly(C) to wild-type rho led to partial protection against bicyclomycin inactivation, while inclusion of both ligands provided near complete protection against inactivation. The observed loss of ATPase activity upon prolonged incubation of rho with excess purified bicyclomycin is attributed to the covalent modification of the protein by the antibiotic at multiple sites.