We report that POL5 encodes the fifth essential DNA polymerase in Saccharomyces cerevisiae. Pol5p was identified and purified from yeast cell extracts and is an aphidicolin-sensitive DNA polymerase that is stimulated by yeast proliferating cell nuclear antigen (PCNA). Thus, we named Pol5p DNA polymerase phi. Temperature-sensitive pol5-1-- -3 mutants did not arrest at G(2)/M at the restrictive temperature. Furthermore, the polymerase active-site mutant POL5dn gene complements the lethality of Delta pol5. These results suggest that the polymerase activity of Pol5p is not required for the in vivo function of Pol5p. rRNA synthesis was severely inhibited at the restrictive temperature in the temperature-sensitive pol5-3 mutant cells, suggesting that an essential function of Pol5p is rRNA synthesis. Pol5p is localized exclusively to the nucleolus and binds near or at the enhancer region of rRNA-encoding DNA repeating units.