The Kae1 (Kinase-associated endopeptidase 1) protein is a member of the recently identified transcription complex EKC and telomeres maintenance complex KEOPS in yeast. Kae1 homologues are encoded by all sequenced genomes in the three domains of life. Although annotated as putative endopeptidases, the actual functions of these universal proteins are unknown. Here we show that the purified Kae1 protein (Pa-Kae1) from Pyrococcus abyssi is an iron-protein with a novel type of ATP-binding site. Surprisingly, this protein did not exhibit endopeptidase activity in vitro but binds cooperatively to single and double-stranded DNA and induces unusual DNA conformational change. Furthermore, Pa-Kae1 exhibits a class I apurinic (AP)-endonuclease activity (AP-lyase). Both DNA binding and AP-endonuclease activity are inhibited by ATP. Kae1 is thus a novel and atypical universal DNA interacting protein whose importance could rival those of RecA (RadA/Rad51) in the maintenance of genome integrity in all living cells.