Topoisomerase V (Topo-V) is the only member of a novel topoisomerase subtype. Topo-V is unique because it is a bifunctional enzyme carrying both topoisomerase and DNA repair lyase activities within the same protein. Previous studies had shown that the topoisomerase domain spans the N-terminus of the protein and is followed by 12 tandem helix-hairpin-helix [(HhH)(2)] domains. There are at least two DNA repair lyase active sites for apurinic/apyrimidinic (AP) site processing, one within the N-terminal region and the second within the C-terminal domain of Topo-V, but their exact locations and characteristics are unknown. In the present study, the N-terminal 78-kDa fragment of Topo-V (Topo-78), containing the topoisomerase domain and one of the lyase DNA repair domains, was characterized by structural and biochemical studies. The results show that an N-terminal 69-kDa fragment is the minimal fragment with both topoisomerase and AP lyase activities. The lyase active site of Topo-78 is at the junction of the fifth and sixth (HhH)(2) domains. From the biochemical and structural data, it appears that Lys571 is the most probable nucleophile responsible for the lyase activity. Our experiments also suggest that Topo-V most likely acts as a Class I AP endonuclease in vivo.