The interaction specificity of salmon sperm DNA with various derivatives of daunorubicin has been studied. The results of binding, viscometric, 1H nuclear magnetic resonance (NMR), flow dichroism, DNA template inhibition, rates of dissociation, and circular dichroism studies are found to be consistent with an intercalation mode of binding of the anthracycline ring as has been shown by other investigators. Moreover, it is observed that (i) strength of binding, (ii) the ease of dissociation of DNA-anthracycline complexes, and (iii) the degree of inhibition of the DNA-dependent RNA polymerase are dependent on the presence of the amino sugar moiety of daunoseamine. The results are consistent with specific H bonding of the amino group of the sugar moiety with DNA as has been suggested earlier by Pigram et al. (Pigram, W.J., Fuller, W., and Hamilton, L.D. (1972), Nature (London), New Biol. 235, 17). Peptide derivatives substituted at the amino sugar function of daunorubicin lower the affinity of the drug to DNA and presumably interfere with the "full insertion" of the anthracycline drugs between base pairs of DNA. The significance of these findings in relation to the biological efficacy of daunorubicin and related derivatives as antileukemic agents is discussed.