Saccharomyces cerevisiae chl1 mutants have a significant increase in the rate of chromosome missegregation. CHL1 encodes a 99 kDa predicted protein with an ATP binding site consensus, a putative helix-turn-helix DNA binding motif, and homology to helicases. Using site-directed mutagenesis, I show that mutations that are predicted to abolish ATP binding in CHL1 inactivate its function in chromosome segregation. Furthermore, overexpression of these mutations interferes with chromosome transmission of a 125 kb chromosome fragment in a wild-type strain. Polyclonal antibodies against CHL1 show that CHL1 is predominantly in the nuclear fraction of S. CEREVISIAE: CHL1 function is more critical for the segregation of small chromosomes. In chl1Delta1/chl1Delta1 mutants, artificial circular or linear chromosomes <150 kb in size exhibit near random segregation (0.12 per cell division), whereas all chromosomes tested >225 kb were lost at rates (5 x 10(-)(3) per cell division) comparable to that observed for endogenous chromosome III. These results reveal an important role for ATPases/DNA helicases in chromosome segregation. Such enzymes may alter DNA topology to allow loading of proteins involved in maintaining sister chromatid cohesion.