Free extracellular DNA is abundant in many aquatic environments. While much of this DNA will be degraded by nucleases secreted by the surrounding microbial community, some is available as transforming material that can be taken up by naturally competent bacteria. One such species is Vibrio cholerae, an autochthonous member of estuarine, riverine, and marine habitats and the causative agent of cholera, whose competence program is induced after colonization of chitin surfaces. In this study, we investigate how Vibrio cholerae's two extracellular nucleases, Xds and Dns, influence its natural transformability. We show that in the absence of Dns, transformation frequencies are significantly higher than in its presence. During growth on a chitin surface, an increase in transformation efficiency was found to correspond in time with increasing cell density and the repression of dns expression by the quorum-sensing regulator HapR. In contrast, at low cell density, the absence of HapR relieves dns repression, leading to the degradation of free DNA and to the abrogation of the transformation phenotype. Thus, as cell density increases, Vibrio cholerae undergoes a switch from nuclease-mediated degradation of extracellular DNA to the uptake of DNA by bacteria induced to a state of competence by chitin. Taken together, these results suggest the following model: nuclease production by low-density populations of V. cholerae might foster rapid growth by providing a source of nucleotides for the repletion of nucleotide pools. In contrast, the termination of nuclease production by static, high-density populations allows the uptake of intact DNA and coincides with a phase of potential genome diversification.