Inhibition of DNA synthesis induces transcription of DNA damage-inducible genes and prevents mitotic entry through the action of the S phase checkpoint. We have isolated a mutant, dun2, defective for both of these responses. DUN2 is identical to POL2, encoding DNA polymerase epsilon (pol epsilon). Unlike sad1 mutants defective for multiple cell cycle checkpoints, pol2 mutants are defective only for the S phase checkpoint and the activation of DUN1 kinase necessary for the transcriptional response to damage. Interallelic complementation and mutation analysis indicate that pol epsilon contains two separable essential domains, an N-terminal polymerase domain and a C-terminal checkpoint domain unique to epsilon polymerases. We propose that DNA pol epsilon acts as a sensor of DNA replication that coordinates the transcriptional and cell cycle responses to replication blocks.