Bacteriophage T7 single-stranded DNA-binding protein (gp2.5) binds to and protects transiently exposed regions of single-stranded DNA (ssDNA) while dynamically interacting with other proteins of the replication complex. We directly visualize fluorescently labelled T7 gp2.5 binding to ssDNA at the single-molecule level. Upon binding, T7 gp2.5 reduces the contour length of ssDNA by stacking nucleotides in a force-dependent manner, suggesting T7 gp2.5 suppresses the formation of secondary structure. Next, we investigate the binding dynamics of T7 gp2.5 and a deletion mutant lacking 21 Cterminal residues (gp2.5-Δ21C) under various template tensions. Our results show that the base sequence of the DNA molecule, ssDNA conformation induced by template tension, and the acidic terminal domain from T7 gp2.5 significantly impact on the DNA binding parameters of T7 gp2.5. Moreover, we uncover a unique template-catalyzed recycling behaviour of T7 gp2.5, resulting in an apparent cooperative binding to ssDNA, facilitating efficient spatial redistribution of T7 gp2.5 during the synthesis of successive Okazaki fragments. Overall, our findings reveal an efficient binding mechanism that prevents the formation of secondary structures by enabling T7 gp2.5 to rapidly rebind to nearby exposed ssDNA regions, during lagging strand DNA synthesis.