On the basis of the finding that in the absence of thiol the nonprotein chromophore of the antitumor drug neocarzinostatin (NCS-chrom) induces highly efficient site-specific cleavage at a single site on the 3' side of a bulge in single-stranded DNA involving entirely 5' chemistry [Kappen, L. S., & Goldberg, I. H. (1993) Science, 261, 1319-1321], transactivation response region (TAR) RNA (29-mer) and its DNA analogue which presumably contain bulge structures were tested as potential substrates for NCS-chrom. In TAR RNA NCS-chrom generates a distinct but weak band due to cleavage at U24 in the bulge. Cleavage at U24 has a pH dependence and time course similar to those for previously studied DNA bulges. This band is not produced in drug reactions containing glutathione, by the protein component of native NCS, or by inactivated NCS-chrom. Cleavage at U24, albeit weak, occurs in an RNA substrate made up of two linear RNA oligomers which presumably can form a bulge akin to that in TAR RNA. In the DNA analogue of TAR RNA, as well as in a DNA duplex made of two linear oligomers that can form a similar bulge, NCS-chrom causes strand cleavage at the T residues in the bulge and at the bases flanking the bulge. Cleavage at T25 in the bulge involves, in addition to 5' chemistry, 4' attack which results in a fragment with mobility characteristic of 3'-phosphoglycolate-ended fragments. Experiments using DNA substrate having deuterium selectively at the 4' or 5' positions of T25 confirm 4' attack and show kinetic shuttling between the two positions.(ABSTRACT TRUNCATED AT 250 WORDS)