Sgs1, the RecQ helicase homolog, and Top3, the type-IA topoisomerase, physically interact and are required for genomic stability in budding yeast. Similarly, topoisomerase III genes physically pair with homologs of SGS1 in humans that are involved in the cancer predisposition and premature aging diseases Bloom, Werner, and Rothmund-Thompson syndromes. In the absence of Top1 activity, sgs1 mutants are severely growth impaired. Here, we investigate the role of Sgs1 helicase activity and its N-terminal Top3 interaction domain by using an allele-replacement technique to integrate mutant alleles at the native SGS1 genomic locus. We compare the phenotype of helicase-defective (sgs1-hd) and N-terminal deletion (sgs1-NDelta) strains to wild-type and sgs1 null strains. Like the sgs1 null, sgs1-hd mutations suppress top3 slow growth, cause a growth defect in the absence of Srs2 helicase, and impair meiosis. However, for recombination and the synthetic interaction with top1Delta mutations, loss of helicase activity exhibits a less severe phenotype than the null. Interestingly, deletion of the Top3 interaction domain of Sgs1 causes a top3-like phenotype, and furthermore, this effect is dependent on helicase activity. These results suggest that the protein-protein interaction between these two DNA-metabolism enzymes, even in the absence of helicase activity, is important for their function in catalyzing specific changes in DNA topology.