Fanconi anemia (FA) cells are hypersensitive to cytotoxicity, cell cycle arrest, and chromosomal aberrations induced by DNA cross-linking agents, such as mitomycin C (MMC) and nitrogen mustard (HN2). Although MMC hypersensitivity is complemented in a subset of FA cells (complementation group C [FA-C]) by wild-type FAC cDNA, the cytoprotective mechanism is unknown. In the current study, we tested the hypothesis that FAC protein functions in the suppression of DNA interstand cross-link (ISC)-induced cell cycle arrest and apoptosis. Comparison of HN2-induced cell cycle arrest and apoptosis with those of its non-cross-linking analogs, diethylaminoethyl chloride and 2-dimethylaminoethyl chloride, delineated the DNA ISC specificity of FAC-mediated cytoprotection. Overexpression of wild-type FAC cDNA in FA-C lymphoblasts (HSC536N cell line) prevented HN2-induced growth inhibition, G2 arrest, and DNA fragmentation that is characteristic of apoptosis. In contrast cytoprotection was not conferred against the effects of the non-cross-linking mustards. Our data show that DNA ISCs induce apoptosis more potently than do DNA monoadducts and suggest that FAC suppresses specifically DNA ISC-induced apoptosis in the G2 phase of the cell cycle.