Bacteriophage Mu transposition requires two phage-encoded proteins, the transposase, Mu A, and an accessory protein Mu B. Mu B is an ATP-dependant DNA binding protein that is required for target capture, target immunity and is an allosteric activator of transpososome function. The recent NMR structure of the C-terminal domain of Mu B (Mu B223-312) revealed that there is a patch of positively charged residues on the solvent exposed surface. This patch may be responsible for the non-specific DNA binding activity displayed by the purified Mu B223-312 peptide. We show that mutations of three lysine residues within this patch completely abolish non-specific DNA binding of the C-terminal peptide (Mu B223-312). To determine how this DNA binding activity affects transposition we mutated these lysine residues in the full-length protein. The full-length protein carrying all three mutations was deficient in both strand transfer and allosteric activation of transpososome function, but retained ATPase activity. Peptide binding studies also revealed that this patch of basic residues within the C-terminal domain of Mu B is within a region of the protein that interacts directly with Mu A. Thus, we conclude that this protein segment contributes to both DNA binding and protein-protein contacts with the Mu transposase.