Initiation of DNA replication by phage lambda requires the ordered assembly and disassembly of a specialized nucleoprotein structure at the origin of replication. In the disassembly pathway, a set of Escherichia coli heat shock proteins termed the Hsp70 complex--DnaK, DnaJ, and GrpE--act with ATP to release lambda P protein from the nucleo-protein complex, freeing the DnaB helicase for its DNA-unwinding reaction. To investigate the mechanism of the release reaction, we have examined the interaction between P and the three heat shock proteins by glycerol gradient sedimentation and gel electrophoresis. We have discovered an ATP-dependent ternary interaction between P, DnaK, and DnaJ; this P.DnaK.DnaJ complex is dissociated by GrpE. We have concluded that the function of the Hsp70 complex in sequestering and releasing P protein provides for the critical step in the disassembly pathway. Based on our data and other work on protein folding, the formation of the P.DnaK.DnaJ complex might involve a conformational shift to a folding intermediate of P.