A novel endo-exonuclease, DmGEN (Drosophila Melanogaster XPG-like endonuclease), was identified in D.melanogaster. DmGEN is composed of five exons and four introns, and the open reading frame encodes a predicted product of 726 amino acid residues with a molecular weight of 82.5 kDa and a pI of 5.36. The gene locus on Drosophila polytene chromosomes was detected at 64C9 on the left arm of chromosome 3 as a single site. The encoded protein showed a relatively high degree of sequence homology with the RAD2 nucleases, especially XPG. Although the XPG-N- and XPG-I-domains are highly conserved in sequence, locations of the domains are similar to those of FEN-1 and EXO-1, and the molecular weight of the protein is close to that of EXO-1. In vitro, DmGEN showed endonuclease and 3'-5' exonuclease activities with both single-stranded DNA (ssDNA) and double-stranded DNA (dsDNA), but the endonuclease action with dsDNA was quite specific: 5'-3' exonuclease activity was found to occur with nicked DNA, while dsDNA was endonucleolytically cut at 3-4 bp from the 5' end. Homologs are widely found in mammals and higher plants. The data suggest that DmGEN belongs to a new class of RAD2 nuclease.