The biomolecular mechanism that the double-stranded DNA viruses employ to insert and package their genomic DNA into a preformed procapsid is still elusive. To better characterize this process, we investigated packaging of bacteriophage phi29 DNA with structural alterations. phi29 DNA was modified in vitro by nicking at random sites with DNase I, or at specific sites with nicking enzyme N.BbvC IA. Single-strand gaps were created by expanding site-specific nicks with T4 DNA polymerase. Packaging of modified phi29 DNA was studied in a completely defined in vitro system. Nicked DNA was packaged at full genome length and with the same efficiency as untreated DNA. Nicks were not repaired during packaging. Gapped DNA was packaged only as a fragment corresponding to the DNA between the genome terminus and gap. Thus the phi29 DNA packaging machinery tolerated nicks, but stopped at gaps. The packaging motor did not require a nick-free DNA backbone, but the presence of both DNA strands, for uninterrupted packaging.