Bacteriophage T2 codes for a DNA-(adenine-N6)methyltransferase (Dam), which is able to methylate both cytosine- and hydroxymethylcytosine-containing DNAs to a greater extent than the corresponding methyltransferase encoded by bacteriophage T4. We have cloned and sequenced the T2 dam gene and compared it with the T4 dam gene. In the Dam coding region, there are 22 nucleotide differences, 4 of which result in three coding differences (2 are in the same codon). Two of the amino acid alterations are located in a region of homology that is shared by T2 and T4 Dam, Escherichia coli Dam, and the modification enzyme of Streptococcus pneumoniae, all of which methylate the sequence 5' GATC 3'. The T2 dam and T4 dam promoters are not identical and appear to have slightly different efficiencies; when fused to the E. coli lacZ gene, the T4 promoter produces about twofold more beta-galactosidase activity than does the T2 promoter. In our first attempt to isolate T2 dam, a truncated gene was cloned on a 1.67-kilobase XbaI fragment. This construct produces a chimeric protein composed of the first 163 amino acids of T2 Dam followed by 83 amino acids coded by the pUC18 vector. Surprisingly, the chimera has Dam activity, but only on cytosine-containing DNA. Genetic and physical analyses place the T2 dam gene at the same respective map location as the T4 dam gene. However, relative to T4, T2 contains an insertion of 536 base pairs 5' to the dam gene. Southern blot hybridization and computer analysis failed to reveal any homology between this insert and either T4 or E. coli DNA.