The RecBCD enzyme of Escherichia coli is an ATP-dependent DNA exonuclease and a helicase. Its exonuclease activity is subject to regulation by an octameric nucleotide sequence called chi. In this study, site-directed mutations were made in the carboxyl-terminal nuclease domain of the RecB subunit, and their effects on RecBCD's enzymatic activities were investigated. Mutation of two amino acid residues, Asp(1067) and Lys(1082), abolished nuclease activity on both single- and double-stranded DNA. Together with Asp(1080), these residues compose a motif that is similar to one shown to form the active site of several restriction endonucleases. The nuclease reactions catalyzed by the RecBCD enzyme should therefore follow the same mechanism as these restriction endonucleases. Furthermore, the mutant enzymes were unable to produce chi-specific fragments that are thought to result from the 3'-5' and 5'-3' single-stranded exonuclease activities of the enzyme during its reaction with chi-containing double-stranded DNA. The results show that the nuclease active site in the RecB C-terminal 30-kDa domain is the universal nuclease active site of RecBCD that is responsible for DNA degradation in both directions during the reaction with double-stranded DNA. A novel explanation for the observed nuclease polarity switch and RecBCD-DNA interaction is offered.