The Saccharomyces cerevisiae RAD51 and RAD54 genes are both required for the occurrence of homologous recombination and for the repair of double-stranded DNA breaks. Previous studies have indicated that Rad51 protein, together with the single-stranded DNA-binding factor replication protein A (RPA), can promote the formation of heteroduplex DNA, which is a key intermediate in homologous recombination. Here we report the purification of the Rad54 protein to near homogeneity and the biochemical testing of its molecular function. We find that Rad54 protein possesses a double-stranded DNA-dependent ATPase activity, and that it interacts with the Rad51 protein. Addition of Rad54 protein to reactions containing Rad51 strongly stimulates the rate of pairing between homologous single-stranded and double-stranded DNA molecules. We conclude that Rad54 acts to overcome kinetic impediments that would limit homologous DNA pairing between recombining chromosomes in vivo.