Damage-specific DNA binding (DDB) activity purifies from HeLa cells as a heterodimer (p127 and p48) and is absent from cells of a subset (Ddb(-)) of xeroderma pigmentosum Group E (XPE) patients. Each subunit was overexpressed in insect cells and purified. Both must be present for the damaged DNA band shift characteristic of the HeLa heterodimer. However, overexpressed p48 peptides containing the mutations found in three Ddb(-) XPE strains are inactive, and wild type p48 restores DDB activity to extracts from a fourth XPE Ddb(-) strain, GM01389, in which compound heterozygous mutations in DDB2 (p48) lead to a L350P change from one allele and a Asn-349 deletion from the other. Although these results indicate that these mutations are each responsible for the loss of DDB activity, they do not affect nuclear localization of p48. In normal fibroblasts, a 4-fold increase in p48 mRNA amount was observed 38 h after UV irradiation, preceding a similar elevation in p48 protein and DDB activity at 48 h, implying that p48 limits DDB activity in vivo. Because DNA repair is virtually complete before 48 h, a role for DDB other than DNA repair is suggested.