We study certain properties of six-dimensional tensionless E-strings (
arising from zero size E-8 instantons). In particular we show that n E
-strings form a bound string which carries an E-8 level-n current alge
bra as well as a left-over conformal system with c = 12n - 4 - (248n/n
+ 30), whose characters can be computed. Moreover we show that the ch
aracters of the n-string bound state are captured by N = 4 U(n) topolo
gical Yang-Mills theory on 1/2K3. This relation not only illuminates c
ertain aspects of E-strings but can also be used to shed light on the
properties of N = 4 topological Yang-Mills theories on manifolds with
b(2)(+) = 1. In particular the E-string partition functions, which can
be computed using local mirror symmetry on a Calabi-Yau threefold, gi
ve the Euler characteristics of the Yang-Mills instanton moduli space
on 1/2K3. Moreover, the partition functions are determined by a gap co
ndition combined with a simple recurrence relation which has its origi
ns in a holomorphic anomaly that has been conjectured to exist for N =
4 topological Yang-Mills on manifolds with b(2)(+) = 1 and is also re
lated to the holomorphic anomaly for higher genus topological strings
on Calabi-Yau threefolds. (C) 1998 Published by Elsevier Science B.V.