The RAD3 gene of Saccharomyces cerevisiae is required for excision repair of DNA damaged by UV radiation and is also essential for cell viability. The approximately 89 kd protein encoded by RAD3 possesses single-stranded DNA dependent ATPase and DNA helicase activities. The sequence Gly-X-Gly-Lys-Thr, believed to be involved in the interaction with purine nucleotides in proteins that bind and hydrolyze the nucleotides, is present in the RAD3 primary structure between amino acids 45 and 49. We report here that the point mutation of Lys-48 to arginine abolishes the RAD3 ATPase and DNA helicase activities but not the ability to bind ATP. These observations highlight the involvement of this lysine residue in the hydrolysis of ATP and indicate that the positive charge on arginine can replace that of the lysine residue in the binding of ATP but not in its hydrolysis. The rad3 Arg-48 mutant is apparently defective in a step subsequent to incision at the damage site in DNA; it can incise UV damaged DNA, but does not remove pyrimidine dimers. The role of the ATPase and DNA helicase activities of the RAD3 protein in its DNA repair and viability functions is discussed.