Correct removal of RNA primers of Okazaki fragments during lagging-strand DNA synthesis is a critical process for the maintenance of genome integrity. Disturbance of this process has severe mutagenic consequences and could contribute to the development of cancer. The role of the mammalian nucleases RNase HI and FEN-1 in RNA primer removal has been substantiated by several studies. Recently, RNase H(35), the Saccharomyces cerevisiae homologue of mammalian RNase HI, was identified and its possible role in DNA replication was proposed (P. Frank, C. Braunshofer-Reiter, and U. Wintersberger, FEBS Lett. 421:23-26, 1998). This led to the possibility of moving to the genetically powerful yeast system for studying the homologues of RNase HI and FEN-1, i.e., RNase H(35) and Rad27p, respectively. In this study, we have biochemically defined the substrate specificities and the cooperative as well as independent cleavage mechanisms of S. cerevisiae RNase H(35) and Rad27 nuclease by using Okazaki fragment model substrates. We have also determined the additive and compensatory pathological effects of gene deletion and overexpression of these two enzymes. Furthermore, the mutagenic consequences of the nuclease deficiencies have been analyzed. Based on our findings, we suggest that three alternative RNA primer removal pathways of different efficiencies involve RNase H(35) and Rad27 nucleases in yeast.