The specificity of papilloma virus E2 protein-DNA binding depends critically upon the sequence of a region of the DNA not in direct contact with the protein, and represents one of the simplest known examples of indirect readout. A detailed characterization of this system in solution is important to the further investigation hypothesis of a structural code for DNA recognition by regulatory proteins. In the crystalline state, the E2 DNA oligonucleotide sequence, d(ACCGAATTCGGT), exhibits three different structural forms. We report herein studies of the structure of E2 DNA in solution based on a series of molecular dynamics (MD) simulations including counterions and water, utilizing both the canonical and various crystallographic structures as initial points of departure. All MDs converged on a single dynamical structure of d(ACCGAATTCGGT) in solution. The predicted structure is in close accord with two of the three crystal structures, and indicates that a significant kink in the double helix at the central ApT step in the other crystal molecule may be a packing effect. The dynamical fine structure was analyzed on the basis of helicoidal parameters. The calculated curvature in the sequence was found to originate primarily from YPR steps in the regions flanking the central AATT tract. In order to study the role of structural adaptation of the DNA in the binding process, a subsequent simulation on the 16-mer cognate sequence d(CAACCGAATTCGGTTG) was initiated from the crystallographic coordinates of the bound DNA in the crystal structure of the protein DNA complex. MD simulations starting with the protein-bound form relaxed rapidly back to the dynamical structure predicted from the previous simulations on the uncomplexed DNA. The MD results show that the bound form E2 DNA is a dynamically unstable structure in the absence of protein, and arises as a consequence of both structural changes intrinsic to the sequence and induced by the interaction with protein.