Calicheamicin gamma 1I is an enediyne antibiotic possessing antitumour activity associated with its ability to bind and following activation, affect double-strand cleavage at oligopyrimidine-oligopurine tracts on DNA. Footprinting and chemical modification studies have identified the (T-C-C-T).(A-G-G-A) sequence as a preferred calicheamicin gamma 1I binding site and established the importance of the 5'-guanine residue as critical for high affinity binding. The sequence specificity of intermolecular recognition has been identified with the aryltetrasaccharide component of the drug together with an important contribution from the iodine atom on the thiobenzoate ring to the affinity of complex formation. Calicheamicin gamma 1I binds to the minor groove of the DNA duplex and in the process positions the enediyne ring to abstract hydrogen atoms from partner strands leading to double-strand cleavage. We report on the solution structure of the calicheamicin gamma 1I-DNA hairpin duplex complex containing a central (T-C-C-T).(A-G-G-A) segment based on a combined analysis of NMR and molecular dynamics calculations including intensity refinement in a water box. The refined solution structures of the complex provide a molecular explanation of the sequence specificity of binding and cleavage by this member of the enediyne family of antitumor antibiotics. Calicheamicin gamma 1I binds to the DNA minor groove with its aryltetrasaccharide segment in an extended conformation spanning the (T-C-C-T).(A-G-G-A) segment of the duplex. Further, the thio sugar B molecule and the thiobenzoate ring C molecule are inserted in an edgewise manner deep into the minor groove with their faces sandwiched between the walls of the groove. A range of intermolecular hydrophobic and hydrogen-bonding interactions account for the sequence specific recognition in the complex. These include critical intermolecular contacts between the iodine and sulfur atoms of the thiobenzoate ring of the drug with the exposed exocyclic amino protons of the 5' and 3'-guanine bases, respectively, of the A-G-G-A segment on the DNA. The bound aryltetrasaccharide in turn positions the enediyne ring deep in the minor groove such that the pro-radical carbon centers of the enediyne are proximal to their anticipated proton abstraction sites. Specifically, the pro-radical C-3 and C-6 atoms are aligned opposite the abstractable H-5' (pro-S) and H-4' protons on partner strands across the minor groove, respectively, in the complex. The DNA duplex is right-handed with Watson-Crick base-pairing in the complex. The helix exhibits a B-DNA type minor groove width at the aryltetrasaccharide binding-site while there is widening of the groove at the adjacent enediyne binding-site in the complex. The DNA helix exhibits localized perturbations at the binding-site as reflected in imino proton complexation shifts and specific altered sugar pucker geometrics associated with complex formation. Sequence-specific binding of calicheamicin gamma 1I to the (T-C-C-T).(A-G-G-A) containing DNA hairpin duplex is favored by the complementarity of the fit through hydrophobic and hydrogen-bonding interactions between the drug and the floor and walls of the minor groove of a minimally perturbed DNA helix.