The genomes of mycobacteriophages of the L5 family, which includes the lytic phage D29, contain several genes putatively linked to DNA synthesis. One such gene is 65, which encodes a protein belonging to the RecA/DnaB helicase superfamily. In this study a recombinant version of the mycobacteriophage D29 gp65 was functionally characterized. The results indicated that it is not a helicase as predicted but an exonuclease that removes 3' arms from forked structures in an ATP-dependent manner. The gp65 exonuclease acts progressively from the 3' end, until the fork junction is reached. As it goes past, its progress is stalled over a stretch of seven to eight nucleotides immediately downstream of the junction. It efficiently acts on forked structures with single stranded arms. It also acts upon 5' and 3' flaps, though with somewhat relaxed specificity, but not on double-stranded forks. Sequence comparison revealed the presence of a KNRXG motif in the C-terminal half of the protein. This is a conserved element found in the RadA/Sms family of DNA repair proteins. A mutation (R203G) in this motif led to complete loss of nuclease activity. This indicated that KNRXG plays an important role in the nuclease function of not only gp65, but possibly other RadA/Sms family proteins as well. This is the first characterization of a bacteriophage-derived RadA/Sms class protein. Given its mode of action, it is very likely that gp65 is involved in processing branched replication intermediates formed during the replication of phage DNA.