Fanconi anemia is a recessively inherited disease characterized by congenital defects, bone marrow failure and cancer susceptibility. Cells from individuals with Fanconi anemia are highly sensitive to DNA-crosslinking drugs, such as mitomycin C (MMC). Fanconi anemia proteins function in a DNA damage response pathway involving breast cancer susceptibility gene products, BRCA1 and BRCA2 (refs. 1,2). A key step in this pathway is monoubiquitination of FANCD2, resulting in the redistribution of FANCD2 to nuclear foci containing BRCA1 (ref. 3). The underlying mechanism is unclear because the five Fanconi anemia proteins known to be required for this ubiquitination have no recognizable ubiquitin ligase motifs. Here we report a new component of a Fanconi anemia protein complex, called PHF9, which possesses E3 ubiquitin ligase activity in vitro and is essential for FANCD2 monoubiquitination in vivo. Because PHF9 is defective in a cell line derived from an individual with Fanconi anemia, we conclude that PHF9 (also called FANCL) represents a novel Fanconi anemia complementation group (FA-L). Our data suggest that PHF9 has a crucial role in the Fanconi anemia pathway as the likely catalytic subunit required for monoubiquitination of FANCD2.