DNA fragmentation factor (DFF) is a heterodimeric protein composed of 45-kDa (DFF45) and 40-kDa (DFF40) subunits, a protein that mediates regulated DNA fragmentation and chromatin condensation in response to apoptotic signals. DFF45 is a specific molecular chaperone and an inhibitor for the nuclease activity of DFF40. Previous studies have shown that upon cleavage of DFF45 by caspase-3, the nuclease activity of DFF40 is relieved of inhibition. Here we further investigate the mechanism of DFF40 activation. We demonstrate that DFF45 can also be cleaved and inactivated by caspase-7 but not by caspase-6 and caspase-8. The cleaved DFF45 fragments dissociate from DFF40, allowing DFF40 to oligomerize to form a large functional complex that cleaves DNA by introducing double strand breaks. Histone H1 directly interacts with DFF, confers DNA binding ability to DFF, and stimulates the nuclease activity of DFF40 by increasing its Kcat and decreasing its Km.