Functional studies strongly suggest that the Mus81-Eme1 complex resolves Holliday junctions (HJs) in fission yeast, but in vitro it preferentially cleaves flexible three-way branched structures that model replication forks or 3' flaps. Here we report that a nicked HJ is the preferred substrate of endogenous and recombinant Mus81-Eme1. Cleavage occurs specifically on the strand that opposes the nick, resulting in resolution of the structure into linear duplex products. Resolving cuts made by the endogenous Mus81-Eme1 complex on an intact HJ are quasi-simultaneous, indicating that Mus81-Eme1 resolves HJs by a nick and counternick mechanism, with a large rate enhancement of the second cut arising from the flexible nature of the nicked HJ intermediate. Recombinant Mus81-Eme1 is ineffective at making the first cut. We also report that HJs accumulate in a DNA polymerase alpha mutant that lacks Mus81, providing further evidence that the Mus81-Eme1 complex targets HJs in vivo.