The XPF/ERCC1 heterodimer is a DNA structure-specific endonuclease that participates in nucleotide excision repair and homology-dependent recombination reactions, including DNA single strand annealing and gene targeting. Here we show that XPF/ERCC1 is stably associated with hRad52, a recombinational repair protein, in human cell-free extracts and that these factors interact directly via the N-terminal domain of hRad52 and the XPF protein. Complex formation between hRad52 and XPF/ERCC1 concomitantly stimulates the DNA structure-specific endonuclease activity of XPF/ERCC1 and attenuates the DNA strand annealing activity of hRad52. Our results reveal a novel role for hRad52 as a subunit of a DNA structure-specific endonuclease and are congruent with evidence implicating both hRad52 and XPF/ERCC1 in a number of homologous recombination reactions. We propose that the ternary complex of hRad52 and XPF/ERCC1 is the active species that processes recombination intermediates generated during the repair of DNA double strand breaks and in homology-dependent gene targeting events.