NM23-H1 belongs to a family of eight gene products in humans that have been implicated in cellular differentiation and development, as well as oncogenesis and tumor metastasis. We have defined NM23-H1 biochemically as a 3'-5' exonuclease by virtue of its ability in stoichiometric amounts to excise single nucleotides in a stepwise manner from the 3' terminus of DNA. The activity is dependent upon the presence of Mg(2+), is most pronounced with single-stranded substrates or mismatched bases at the 3' terminus of double-stranded substrates, and is inhibited by both ATP and the incorporation of cordycepin, a 2'-deoxyadenosine analogue, into the 3'-terminal position. The 3'-5' exonuclease activity was assigned to NM23-H1 by virtue of: 1) precise coelution of enzymatic activity with wild-type and mutant forms of NM23-H1 protein during purification by hydroxylapatite and gel filtration column high performance liquid chromatography and 2) significantly diminished activity exhibited by purified recombinant mutant forms of the proteins. Lysine 12 appears to play an important role in the catalytic mechanism, as evidenced by the significant reduction in 3'-5' exonuclease activity resulting from a Lys(12) to glutamine substitution within the protein. 3'-5' Exonucleases are believed to play an important role in DNA repair, a logical candidate function underlying the putative antimetastatic and oncogenic activities of NM23-H1.