DNA damage, such as abasic sites and DNA strand breaks with 3'-phosphate and 3'-phosphoglycolate termini present cytotoxic and mutagenic threats to the cell. Class II AP endonucleases play a major role in the repair of abasic sites as well as of 3'-modified termini. Human cells contain two class II AP endonucleases, the Ape1 and Ape2 proteins. Ape1 possesses a strong AP-endonuclease activity and weak 3'-phosphodiesterase and 3'-5' exonuclease activities, and it is considered to be the major AP endonuclease in human cells. Much less is known about Ape2, but its importance is emphasized by the growth retardation and dyshematopoiesis accompanied by G2/M arrest phenotype of the APE2-null mice. Here, we describe the biochemical characteristics of human Ape2. We find that Ape2 exhibits strong 3'-5' exonuclease and 3'-phosphodiesterase activities and has only a very weak AP-endonuclease activity. Mutation of the active-site residue Asp 277 to Ala in Ape2 inactivates all these activities. We also demonstrate that Ape2 preferentially acts at mismatched deoxyribonucleotides at the recessed 3'-termini of a partial DNA duplex. Based on these results we suggest a novel role for human Ape2 as a 3'-5' exonuclease.