Helicases are vital enzymes that carry out strand separation of duplex nucleic acids during replication, repair and recombination. Bacteriophage T7 gene product 4 is a model hexameric helicase that has been observed to use dTTP, but not ATP, to unwind double-stranded (ds)DNA as it translocates from 5' to 3' along single-stranded (ss)DNA. Whether and how different subunits of the helicase coordinate their chemo-mechanical activities and DNA binding during translocation is still under debate. Here we address this question using a single-molecule approach to monitor helicase unwinding. We found that T7 helicase does in fact unwind dsDNA in the presence of ATP and that the unwinding rate is even faster than that with dTTP. However, unwinding traces showed a remarkable sawtooth pattern where processive unwinding was repeatedly interrupted by sudden slippage events, ultimately preventing unwinding over a substantial distance. This behaviour was not observed with dTTP alone and was greatly reduced when ATP solution was supplemented with a small amount of dTTP. These findings presented an opportunity to use nucleotide mixtures to investigate helicase subunit coordination. We found that T7 helicase binds and hydrolyses ATP and dTTP by competitive kinetics such that the unwinding rate is dictated simply by their respective maximum rates V(max), Michaelis constants K(M) and concentrations. In contrast, processivity does not follow a simple competitive behaviour and shows a cooperative dependence on nucleotide concentrations. This does not agree with an uncoordinated mechanism where each subunit functions independently, but supports a model where nearly all subunits coordinate their chemo-mechanical activities and DNA binding. Our data indicate that only one subunit at a time can accept a nucleotide while other subunits are nucleotide-ligated and thus they interact with the DNA to ensure processivity. Such subunit coordination may be general to many ring-shaped helicases and reveals a potential mechanism for regulation of DNA unwinding during replication.