By the sequential action of dCTP deaminase and dUTPase, dCTP is converted to dUMP, the precursor of thymidine nucleotides. In addition, dUTPase has an essential role as a safeguard against uracil incorporation in DNA. The putative dCTP deaminase (MJ0430) and dUTPase (MJ1102) from the hyperthermophilic archaeon Methanocaldococcus jannaschii were overproduced in Escherichia coli. Unexpectedly, we found the MJ0430 protein capable of both reactions, i.e. hydrolytic deamination of the cytosine ring and hydrolytic cleavage of the phosphoanhydride bond between the alpha- and beta-phosphates. When the reaction was followed by thin layer chromatography using [3H]dCTP as substrate, dUMP and not dUTP was identified as a reaction product. In the presence of unlabeled dUTP, which acted as an inhibitor, no label was transferred from [3H]dCTP to the pool of dUTP. This finding strongly suggests that the two consecutive steps of the reaction are tightly coupled within the enzyme. The hitherto unknown bifunctionality of the MJ0430 protein appears beneficial for the cells because the toxic intermediate dUTP is never released. The MJ0430 protein also catalyzed the hydrolysis of dUTP to dUMP but with a low affinity for the substrate (Km >100 micro m). According to limited proteolysis, the C-terminal residues constitute a flexible region. The other protein investigated, MJ1102, is a specific dUTPase with a Km for dUTP (0.4 micro m) comparable in magnitude with that found for previously characterized dUTPases. Its physiological function is probably to degrade dUTP derived from other reactions in nucleotide metabolism.