4-Hydroxyaminoquinoline 1-oxide (4HAQO), the proximate form of a carcinogen 4-nitroquinoline 1-oxide (4NQO), was activated by 4HAQO-activating enzyme to react with transforming DNA of Bacillus subtilis. Inactivation of the transforming activity proceeded in parallel with the extent of binding of enzyme-activated 4HAQO to DNA. The inactivated DNA was susceptible to host-cell reactivation (Hcr) as judged from the difference in the surviving activity assayed with Hcr plus and Hcr- hosts, indicating the reparability of the DNA damage. The enzymatic binding of 4HAQO did not induce strand breaks in DNA as measured by its sedimentation rate in alkaline sucrose density gradient. It is estimated that the activated 4HAQO binding has almost the same efficiency of inactivating the transforming DNA as pyrimidine dimers induced by UV radiation. The results indicate that the activating enzyme is responsible for intracellular reaction of 4HAQO with DNA.