Yeast TFIIH is composed of six subunits: Rad3, Rad25, TFB1, SSL1, p55, and p38. In addition to TFIIH, we have purified a subassembly of the factor that lacks Rad3 and Rad25 and which we refer to as TFIIHi. In the in vitro nucleotide excision repair (NER) system that consists entirely of purified proteins, we show that neither TFIIHi nor a mixture of purified Rad3 and Rad25 proteins is active in NER but that the combination of TFIIHi with Rad3 and Rad25 promotes the incision of UV-damaged DNA. These results provide the first evidence for a direct requirement of Rad3, Rad25, and of one or more of the TFIIHi subunits in the incision step of NER. The NER efficacy of TFIIH is greatly diminished or abolished upon substitution of Rad3 with the rad3 Arg-48 mutant protein or Rad25 with the rad25 Arg-392 mutant protein, respectively, thus indicating a role of the Rad3 and Rad25 DNA helicase functions in the incision of damaged DNA. Our results further indicate that the carboxyl-terminal domain kinase (CTD) TFIIK is dispensable for the incision of damaged DNA in vitro. These studies reveal the differential requirement of Rad3 DNA helicase and CTD kinase activities in damage-specific incision versus RNA polymerase II transcription.