The RAD2 family of nucleases includes human XPG (Class I), FEN1 (Class II), and HEX1/hEXO1 (Class III) products gene. These proteins exhibit a blend of substrate specific exo- and endonuclease activities and contribute to repair, recombination, and/or replication. To date, the substrate preferences of the EXO1-like Class III proteins have not been thoroughly defined. We report here that the RAD2 domain of human exonuclease 1 (HEX1-N2) exhibits both a robust 5' to 3' exonuclease activity on single- and double-stranded DNA substrates as well as a flap structure-specific endonuclease activity but does not show specific endonuclease activity at 10-base pair bubble-like structures, G:T mismatches, or uracil residues. Both the 5' to 3' exonuclease and flap endonuclease activities require a divalent metal cofactor, with Mg(2+) being the preferred metal ion. HEX1-N2 is approximately 3-fold less active in Mn(2+)-containing buffers and exhibits <5% activity in the presence of Co(2+), Zn(2+), or Ca(2+). The optimal pH range for the nuclease activities of HEX1-N2 is 7.2-8.2. The specific activity of its 5' to 3' exonuclease function is 2.5-7-fold higher on blunt end and 5'-recessed double-stranded DNA substrates compared with duplex 5'-overhang or single-stranded DNAs. The flap endonuclease activity of HEX1-N2 is similar to that of human flap endonuclease-1, both in terms of turnover efficiency (k(cat)) and site of incision, and is as efficient (k(cat)/K(m)) as its exonuclease function. The nuclease activities of HEX1-N2 described here indicate functions for the EXO1-like proteins in replication, repair, and/or recombination that may overlap with human flap endonuclease-1.