Two forms of DNA helicase activity, Rad3 and ATPase III, were previously purified from the yeast Saccharomyces cerevisiae and characterized. Here, we have identified and purified an additional DNA helicase activity from S. cerevisiae to near homogeneity. This helicase differs from those described previously in its chromatographic behavior, molecular weight, enzymatic properties, and genetic properties. Thus, we named it DNA helicase III. Its apparent molecular mass is about 120 kDa as determined by polyacrylamide gel electrophoresis in the presence of sodium dodecyl sulfate. DNA helicase III requires a divalent cation Mg2+ or Mn2+, either ATP or dATP, and a single-stranded portion on the duplex substrate. Helicase III moves in the 5'-->3' direction on single-stranded portions of the substrate and unwinds the strand of DNA in the 3'-->5' direction. It also has an intrinsic DNA-dependent ATPase (dATPase) activity that hydrolyzes either ATP or dATP to ADP or dADP and orthophosphate in the presence of DNA. DNA helicase III activity was not affected by either rad3 or radH mutations, suggesting that it is encoded by a gene different from RAD3 and RADH.