The Escherichia coli Rep helicase unwinds duplex DNA during replication. The functional helicase appears to be a dimer that forms only on binding DNA. Both protomers of the dimer can bind either single-stranded or duplex DNA. Because binding and hydrolysis of adenosine triphosphate (ATP) are essential for helicase function, the energetics of DNA binding and DNA-induced Rep dimerization were studied quantitatively in the presence of the nucleotide cofactors adenosine diphosphate (ADP) and the nonhydrolyzable ATP analog AMPP(NH)P. Large allosteric effects of nucleotide cofactors on DNA binding to Rep were observed. Binding of ADP favored Rep dimers in which both protomers bound single-stranded DNA, whereas binding of AMPP(NH)P favored simultaneous binding of both single-stranded and duplex DNA to the Rep dimer. A rolling model for the active unwinding of duplex DNA by the dimeric Rep helicase is proposed that explains vectorial unwinding and predicts that helicase translocation along DNA is coupled to ATP binding, whereas ATP hydrolysis drives unwinding of multiple DNA base pairs for each catalytic event.