XPG is a structure-specific endonuclease required for nucleotide excision repair (NER). XPG incision defects result in the cancer-prone syndrome xeroderma pigmentosum, whereas truncating mutations of XPG cause the severe postnatal progeroid developmental disorder Cockayne syndrome. We show that XPG interacts directly with WRN protein, which is defective in the premature aging disorder Werner syndrome, and that the two proteins undergo similar subnuclear redistribution in S phase and colocalize in nuclear foci. The co-localization was observed in mid- to late S phase, when WRN moves from nucleoli to nuclear foci that have been shown to contain both protein markers of stalled replication forks and telomeric proteins. We mapped the interaction between XPG and WRN to the C-terminal domains of each, and show that interaction with the C-terminal domain of XPG strongly stimulates WRN helicase activity. WRN also possesses a competing DNA single-strand annealing activity that, combined with unwinding, has been shown to coordinate regression of model replication forks to form Holliday junction/chicken foot intermediate structures. We tested whether XPG stimulated WRN annealing activity, and found that XPG itself has intrinsic strand annealing activity that requires the unstructured R- and C-terminal domains but not the conserved catalytic core or endonuclease activity. Annealing by XPG is cooperative, rather than additive, with WRN annealing. Taken together, our results suggest a novel function for XPG in S phase that is, at least in part, performed coordinately with WRN, and which may contribute to the severity of the phenotypes that occur upon loss of XPG.