The anticancer drug actinomycin D (ActD) binds to DNA by intercalating its phenoxazone ring at a GpC step with the drug’s two cyclic pentapeptides located in the DNA minor groove. The binding affinity to the GpC site is influenced by the flanking sequences. We have analyzed the structure of the complexes of ActD-d(GAAGCTTC)(2) and ActD-d(GATGCTTC)(2) by NOE-restrained refinement. Binding of ActD to the -(AGCT)(2)-sequence causes the N-methyl group of Me Val to wedge between the bases at the ApG step, resulting in kinks on both sides of the intercalator site. Surprisingly ActD forms a very stable complex with d(GATGCTTC)(2) in which the same methyl group now fits snugly in a cavity at the TpG step created by the T:T mismatched base pair. In contrast, ActD does not stabilize the unstable A:A-mismatched d(GAAGCATC)(2) duplex to a significant extent. Such high-resolution structural information helps reveal the sequence preference of ActD toward -XGCY-tetranucleotides. The triplet repeat (CAG)(n) and (CTG)(n) motifs, which are associated with several genetic diseases such as Huntington’s disease/spinobulbar muscular atrophy and myotonic dystrophy, contain -AGCA- and -TGCT-sequences. It was found by NMR spectroscopic studies that ActD significantly stabilizes the mismatched (CAG)(n) and (CTG)(n) duplexes and prevents them from annealing with each other to form the Watson-Crick duplex. This suggests that ActD may trap the cruciform structure of the (CAG)(n)/(CTG)(n) sequence and may exert certain biological actions (e.g., stopping the expansion during replication), since interference of the equilibrium between the duplex and cruciform structures by proteins or drugs may have biological consequences.