Double stranded DNA (dsDNA) viruses such as herpesviruses, adenoviruses, and many bacteriophages, have common development pathways. In these cases, a packaging motor (the terminase enzyme) inserts the viral genome into a capsid shell. We study the DNA packaging motor from phage lambda as a model system. Lambda terminase plays four critical roles in virus assembly: (1) It has a site specific DNA binding activity where it binds to the cos sequence in the lambda genome, (2) it has an endonuclease activity where it symmetrically nicks the duplex at the cosN site, (3) it has a strand-separation activity that separates the cleaved DNA strands, and (4) it has “packaging” activity where it translocates the “matured” viral genome into a capsid shell through a portal ring structure. The lambda gpFI protein is required for virus assembly in vivo but the function remains unknown. In this study, we use a defined in vitro system to study the effects of gpFI on the endonuclease, strand-separation, and DNA packaging activities of lambda terminase as our first steps towards an understanding the function of gpFI in virus assembly. Our data demonstrate that gpFI affects the cos-cleavage and strand-separation activities of terminase. In contrast, the protein significantly increases the efficiency of DNA packaging in vitro. In addition, we demonstrate a direct interaction between gpFI and the procapsid shell. The significance of these results with respect to the biological role of gpFI in virus assembly is discussed. The information obtained from these experiments will be useful in understanding similar processes in the eukaryotic herpesviruses and adenoviruses.