Metnase (SETMAR) is a SET-transposase fusion protein that promotes nonhomologous end joining (NHEJ) repair in humans. Although both SET and the transposase domains were necessary for its function in DSB repair, it is not clear what specific role Metnase plays in the NHEJ. In this study, we show that Metnase possesses a unique endonuclease activity that preferentially acts on ssDNA and ssDNA-overhang of a partial duplex DNA. Cell extracts lacking Metnase poorly supported DNA end joining, and addition of wt-Metnase to cell extracts lacking Metnase markedly stimulated DNA end joining, while a mutant (D483A) lacking endonuclease activity did not. Given that Metnase overexpression enhanced DNA end processing in vitro, our finding suggests a role for Metnase's endonuclease activity in promoting the joining of noncompatible ends.