The polIII core subassembly of DNA polymerase III holoenzyme is composed of the alpha (DNA polymerase), epsilon (editing exonuclease), and theta subunits. We have identified holE encoding theta (8.6 kDa) at 40.4 min, expressed and purified 300 mg of theta, and have studied its function by constituting the polIII core from pure alpha, epsilon, and theta subunits. The theta subunit binds the epsilon proofreader tightly, but it does not form a detectable complex with alpha. The epsilon subunit also binds to alpha (Maki, H., and Kornberg, A. (1987) Proc. Natl. Acad. Sci. U. S. A. 84, 4389-4392). Hence, the subunit arrangement of the polIII core is linear, alpha epsilon theta. Interaction of theta with epsilon slightly stimulated epsilon in excision of a 3' terminal mismatched nucleotide, suggesting a possible role for theta in fidelity.