The gene MUS81 p6ethyl methansulfonate, UV sensitive) was identified as clone 81 in a two-hybrid screen using the Saccharomyces cerevisiae Rad54 protein as a bait. It encodes a novel protein with a predicted molecular mass of 72,316 (632 amino acids) and contains two helix-hairpin-helix motifs, which are found in many proteins involved in DNA metabolism in bacteria, yeast, and mammals. Mus81p also shares homology with motifs found in the XPF endonuclease superfamily. Deletion of MUS81 caused a recessive methyl methansulfonate- and UV-sensitive phenotype. However, mus81delta cells were not significantly more sensitive than wild-type to gamma-radiation or double-strand breaks induced by HO endonuclease. Double mutant analysis suggests that Rad54p and Mus81p act in one pathway for the repair of, or tolerance to, UV-induced DNA damage. A complex containing Mus81p and Rad54p was identified in immunoprecipitation experiments. Deletion of MUS81 virtually eliminated sporulation in one strain background and reduced sporulation and spore viability in another. Potential homologs of Mus81p have been identified in Schizosaccharomyces pombe, Caenorhabditis elegans and Arabidopsis thaliana. We hypothesize that Mus81p plays a role in the recognition and/or processing of certain types of DNA damage (caused by UV and MMS) during repair or tolerance processes involving the recombinational repair pathway.