Fanconi anemia (FA) is a human autosomal recessive cancer susceptibility disorder characterized by cellular sensitivity to mitomycin C and defective cell-cycle progression. Six FA genes (corresponding to subtypes A, C, D2, E, F, and G) have been cloned, and the encoded FA proteins interact in a common pathway. DNA damage activates this pathway, leading to monoubiquitination of the downstream FANCD2 protein and targeting to nuclear foci containing BRCA1. In the current study, we demonstrate that FANCD2 also undergoes monoubiquitination during S phase of the cell cycle. Monoubiquitinated FANCD2 colocalizes with BRCA1 and RAD51 in S-phase-specific nuclear foci. Monoubiquitination of FANCD2 is required for normal cell-cycle progression following cellular exposure to mitomycin C. Our data indicate that the monoubiquitination of FANCD2 is highly regulated, and they suggest that FANCD2/BRCA1 complexes and FANCD2/RAD51 complexes participate in an S-phase-specific cellular process, such as DNA repair by homologous recombination.