Bulge structures in nucleic acids are of general biological significance and are potential targets for therapeutic drugs. It has been shown in a previous study that thiol-activated neocarzinostatin chromophore is able to cleave duplex DNA selectively at a position opposite a single unpaired cytosine or thymine base on the 3' side. In this work, we studied in greater detail the nature of this type of cleavage and the basis for the selectivity of the bulge site cleavage over the usual strand cleavage at a T site in the duplex region by using duplexes containing an internal control and a bulge, which is composed of different types and number of bases. Experimental results indicated that the bulge-induced cleavage is initiated by 5' hydrogen abstraction and is greatly affected by the base composition of the bulge. A single-base bulge, especially when containing a purine, yields higher efficiency and greater selectivity for the bulge-induced cleavage. In particular, a single adenine base gives rise to the highest cleavage yield and provides over 20 times greater selectivity for cleavage at the bulge site compared with the internal control site in duplexes. The binding dissociation constants of postactivated drug for a stem-loop structure containing a one- or two-base bulge in the stem, measured by fluorescence quenching, show that the binding is about 3-4 times stronger for bulge-containing duplexes than for perfect hairpin duplexes. For RNA.DNA hybrid duplexes, where the DNA is the target strand and the RNA is the bulge-containing strand, bulge-induced cleavage was observed, although at low yield. On the other hand, when RNA is the nonbulge strand, no bulge-induced cleavage was found. When the reaction is performed in the absence of oxygen, the major product is a covalent adduct, and it is at the same location as the cleavage site under aerobic conditions.