A catalytic DNA-templated reaction of hydrolysis of an ester group in an N-modified peptide nucleic acid, which is activated by a Cu2+ Complex-PNA, has been discovered and optimized. Both the ester-containing PNA and the metal complex PNA bind neighboring sites on a template DNA. This brings the reacting groups (the ester and the Cu2+ Complex) in proximity to each other and accelerates the hydrolysis of the ester similar to 500 times in comparison with its hydrolysis in the absence of the template. The hydrolysis reaction provides > 10(2)-fold kinetic discrimination between DNAs that are different from each other at a single nucleotide position. Natural enzyme T4 DNA ligase is slightly less selective. On the basis of this reaction a fully homogeneous and sensitive assay for sequence-specific DNA detection has been developed (10 fmol DNA). Identification of one of four DNAs (variation at one position) can be done in a single experiment. Since the Cu2+ ion is tightly bound in an associate containing the ester PNA, the metal complex PNA, and the template DNA, application of this method in buffers containing other Cu2+-binding ligands, e.g., PCR buffer and physiological buffer, is possible.