The bacterial helicase-nuclease complex AddAB converts double-stranded DNA breaks into substrates for RecA-dependent recombinational repair. Here we show that the AddB subunit contains a novel class of nuclease domain distinguished by the presence of an iron-sulfur cluster. The cluster is coordinated by an unusual arrangement of cysteine residues that originate from both sides of the AddB nuclease, forming an "iron staple" that is required for the local structural integrity of this domain. Disruption of the iron-sulfur cluster by mutagenesis eliminates the ability of AddAB to bind to duplex DNA ends without affecting the single-stranded DNA-dependent ATPase activity. Sequence analysis suggests that a related iron staple nuclease domain is present in the eukaryotic DNA replication/repair factor Dna2, where it is also associated with a DNA helicase motor.