The double-strand DNA break repair pathway, non-homologous DNA end joining (NHEJ), is distinctive for the flexibility of its nuclease, polymerase and ligase activities. Here we find that the joining of ends by XRCC4-ligase IV is markedly influenced by the terminal sequence, and a steric hindrance model can account for this. XLF (Cernunnos) stimulates the joining of both incompatible DNA ends and compatible DNA ends at physiologic concentrations of Mg2+, but only of incompatible DNA ends at higher concentrations of Mg2+, suggesting charge neutralization between the two DNA ends within the ligase complex. XRCC4-DNA ligase IV has the distinctive ability to ligate poly-dT single-stranded DNA and long dT overhangs in a Ku- and XLF-independent manner, but not other homopolymeric DNA. The dT preference of the ligase is interesting given the sequence bias of the NHEJ polymerase. These distinctive properties of the XRCC4-DNA ligase IV complex explain important aspects of its in vivo roles.