ATP-dependent DNA ligases catalyze the sealing of 5'-phosphate and 3'-hydroxyl termini at DNA nicks by means of a series of three nucleotidyl transfer steps. Here we have analyzed by site-directed mutagenesis the roles of conserved amino acids of Chlorella virus DNA ligase during the third step of the ligation pathway, which entails reaction of the 3'-OH of the nick with the DNA-adenylate intermediate to form a phosphodiester and release AMP. We found that Asp65 and Glu67 in nucleotidyltransferase motif III and Glu161 in motif IV enhance the rate of step 3 phosphodiester formation by factors of 20, 1000 and 60, respectively. Asp29 and Arg32 in nucleotidyltransferase motif I enhance the rate of step 3 by 60-fold. Gel shift analysis showed that mutations of Arg32 and Asp65 suppressed ligase binding to a pre-adenylated nick, whereas Asp29, Glu67 and Glu161 mutants bound stably to DNA-adenylate. We infer that Asp29, Glu67 and Glu161 are involved directly in the step 3 reaction. In several cases, the effects of alanine or conservative mutations on step 3 were modest compared to their effects on the composite ligation reaction and individual upstream steps. These results, in concert with available crystallographic data, suggest that the active site of DNA ligase is remodeled during the three steps of the pathway and that some of the catalytic side chains play distinct roles at different stages.