The Mre11, Rad50 and Nbs1 proteins make up the conserved multi-functional Mre11 (MRN) complex involved in multiple, critical DNA metabolic processes including double-strand break repair and telomere maintenance. The Mre11 protein is a nuclease with broad substrate recognition, but MRN-dependent processes requiring the nuclease activity are not clearly defined. Here, we report the functional and structural characterization of a nuclease-deficient Mre11 protein termed mre11-3. Importantly, the hmre11-3 protein has wild-type ability to bind DNA, Rad50 and Nbs1; however, nuclease activity was completely abrogated. When expressed in cell lines from patients with ataxia telangiectasia-like disorder (ATLD), hmre11-3 restored the formation of ionizing radiation-induced foci. Consistent with the biochemical results, the 2.3 A crystal structure of mre11-3 from Pyrococcus furiosus revealed an active site structure with a wild-type-like metal-binding environment. The structural analysis of the H85L mutation provides a detailed molecular basis for the ability of mre11-3 to bind but not hydrolyze DNA. Together, these results establish that the mre11-3 protein provides an excellent system for dissecting nuclease-dependent and independent functions of the Mre11 complex.