DescriptionBloom's Syndrome (BS) is a rare human disease characterized by genome instability and cancer predispostion. The gene mutated in BS, BLM, encodes a member of the RecQ family of DNA helicases. This family consists of five human paralogs that play crucial roles in guarding against DNA rearrangements. All BLM orthologs, including budding yeast Sgs1, bind stably to a protein complex composed of DNA topoisomerase 3α (Top3) and the OB-fold protein Rmi1. Although the BLM/Sgs1 complex is known to suppress homologous recombination, it's mechanism of action is unknown. I found that a stable Top3-Rmi1 complex can be isolated from yeast cells overexpressing these two subunits and it shows increased superhelical relaxation activity compared to Top3 alone. The Rmi1 subunit also stimulates Top3 activity in reconstitution experiments. In both cases, elevated temperatures are required for optimal relaxation unless the substrate contains a ssDNA bubble. Interestingly, Rmi1 binds only weakly to ssDNA on its own, but it stimulates the ssDNA binding activity of Top3 five-fold. Top3 and Rmi1 also cooperate to bind the Sgs1 N-terminus and promote its interaction with single-strand (ss) DNA. In addition to the highly-conserved DNA helicase domain, all BLM/Sgs1 orthologs contain a large (652 aa) N-terminal domain that has no known catalytic activity. To determine the function of the N-terminal domain, I assayed truncated Sgs1 proteins for ssDNA binding activity. I identified a sub-domain of the Sgs1 N-terminus (SE, aa #103-322) that displays in vitro ssDNA binding, ssDNA annealing and strand exchange (SE) activities. These activities are conserved in the human and Drosophila orthologs. Strand exchange between duplex DNA and homologous ssDNA requires no cofactors and is inhibited by a single mismatched base-pair. The SE domain of Sgs1 is required in vivo for the suppression of hyper-recombination, suppression of synthetic-lethality and heteroduplex rejection. The top3∆ slow-growth phenotype is also SE-dependent. Surprisingly, the highly divergent SE domain from human BLM functions in yeast. Thus, SE activity is a new molecular function of BLM/Sgs1 that is conserved in other recombinases. The data suggest that at least one role of SE is to mediate the strand-passage events catalyzed by Top3-Rmi1.