Werner's syndrome (WS) is an autosomal recessive disorder in humans characterized by the premature development of a partial array of age-associated pathologies. WRN, the gene defective in WS, encodes a 1432 amino acid protein (hWRN) with intrinsic 3'-->5' DNA helicase activity. We recently showed that hWRN is also a 3'-->5' exonuclease. Here, we further characterize the hWRN exonuclease. hWRN efficiently degraded the 3' recessed strands of double-stranded DNA or a DNA-RNA heteroduplex. It had little or no activity on blunt-ended DNA, DNA with a 3' protruding strand, or single-stranded DNA. The hWRN exonuclease efficiently removed a mismatched nucleotide at a 3' recessed terminus, and was capable of initiating DNA degradation from a 12-nt gap, or a nick. We further show that the mouse WRN (mWRN) is also a 3'-->5' exonuclease, with substrate specificity similar to that of hWRN. Finally, we show that hWRN forms a trimer and interacts with the proliferating cell nuclear antigen in vitro. These findings provide new data on the biochemical activities of WRN that may help elucidate its role(s) in DNA metabolism.