DNA ligases catalyze the joining of strand breaks in duplex DNA. The DNA ligase of Pyrococcus furiosus (PfuLig), which architecturally resembles the human DNA ligase I (hLigI), comprises an N-terminal DNA-binding domain, a middle adenylylation domain, and a C-terminal oligonucleotide-binding (OB)-fold domain. Here we addressed the C-terminal helix in the OB-fold domain of PfuLig by mutational analysis. The crystal structure of PfuLig revealed that this helix stabilizes a closed conformation of the enzyme by forming several ionic interactions with the adenylylation domain. The C-terminal helix is oriented differently in hLigI when DNA is bound; this suggested that disruption of its interaction with the adenylylation domain might facilitate the binding of DNA substrates. We indeed identified one of its residues, Asp540, as being critical for ligation efficiency. The D540R mutation improved the overall ligation activity relative to the wild-type enzyme, and at lower temperatures; this is relevant to applications such as ligation amplification reactions. Physical and biochemical analyses indicated that the improved ligation activity of the D540R variant arises from effects on the ligase adenylylation step and on substrate DNA binding in particular.