The yeast Saccharomyces cerevisiae contains an endoexonuclease yNucR that has been implicated in both recombination and repair. We describe the isolation and characterization of the corresponding gene. Within the predicted N-terminal half of the protein there is extensive homology (approximately 50%) with human rho genes, which are related to the ras oncogene, particularly in the proposed GTP-binding region. The C-terminal region, which is related to the Escherichia coli recC protein, presumably encodes the endoexonuclease activity. The yNucR may thus represent a new class of GTP-binding proteins. Because of the chimeric nature of the polypeptide, this protein is renamed RhoNUC (rather than the original yNucR) and the gene is RNC1 for Rho-associated-NuClease. Over expression of the gene leads to altered cell growth and nuclear morphology. We propose that the gene plays an important role in cell development as well as DNA repair/recombination.