The staphylococcal plasmid pC194 is replicated through the rolling-circle mechanism. Its replication protein RepA has been proposed to initiate replication by making a bond between Y214 and DNA phosphate via transesterification and to terminate it by hydrolyzing DNA with E210 and carrying out strand transfer. We tested this model by examining the catalytic functions of the protein with purified RepA proteins and single-stranded DNA oligomers. The wild-type RepA formed a covalent bond with the DNA phosphate at the predicted initiation site. It hydrolyzed the phosphodiester bond at the site, which activity was found to depend on the presence of a large pseudopalindrome contained in the replication origin. The protein carried out a strand-transfer reaction which mimicked the termination step of replication. A Y214F and an E210A mutant respectively lacked the transesterification and the hydrolytic activity. These results are consistent with the previously proposed model, which was based solely on molecular genetics results. In addition, an E142A mutant was found to lack both activities, suggesting that the residue may coordinate the divalent cation necessary for them. A possible role of the pseudopalindrome in controlling the two activities of RepA during a replication cycle is also discussed.