The Rad1-Rad10 nuclease of yeast and its human counterpart ERCC1-XPF are indispensable for nucleotide excision repair, where they act by cleaving the damaged DNA strand on the 5'-side of the lesion. Intriguingly, the ERCC1- and XPF-deficient mice show a severe postnatal growth defect and they die at approximately 3 wk after birth. Here we present genetic and biochemical evidence for the requirement of Rad1-Rad10 nuclease in the removal of 3'-blocked termini from DNA strand breaks induced on treatment of yeast cells with the oxidative DNA damaging agent H(2)O(2). Our genetic studies indicate that 3'-blocked termini are removed in yeast by the three competing pathways that involve the Apn1, Apn2, and Rad1-Rad10 nucleases, and we show that the Rad1-Rad10 nuclease proficiently cleaves DNA modified with a 3'-phosphoglycolate terminus. From these observations, we infer that deficient removal of 3'-blocking groups formed from the action of oxygen free radicals generated during normal cellular metabolism is the primary underlying cause of the inviability of apn1Delta apn2Delta rad1Delta and apn1Deltaapn2Delta rad10Delta mutants and that such a deficiency accounts also for the severe growth defects of ERCC1- and XPF-deficient mice.