Evidence is presented that the sequence-specific DNA binding of esperamicin is accompanied by structural distortion of the host DNA that depends on hydrophobic interactions. In the first part of this paper, we describe the effects of conformational freedom of DNA on the DNA-cutting efficiency of esperamicin. If conformational distortion of DNA is significantly required for binding of the drug, then the drug should possess a lower binding/cleaving efficiency for conformationally more restricted DNAs. Our results on model DNAs reveal a substantial decrease in the DNA-cleaving efficiency of esperamicin as the conformational freedom of DNA decrease. In the second part we demonstrate that esperamicin binds to DNA with considerably higher affinity in solutions containing organic solvents. This observation indicates that the required distortion of DNA depends on hydrophobic interactions. Molecular origins of the sequence-specific binding are also discussed on the basis of all available data.