XRCC1 plays a central role in mammalian single-strand break repair. Although it has no enzymatic activity of its own, it stimulates the activities of polynucleotide kinase/phosphatase (PNKP), and this function is enhanced by protein kinase CK2 mediated phosphorylation of XRCC1. We have previously shown that non-phosphorylated XRCC1 stimulates the kinase activity of PNKP by increasing the turnover of PNKP. Here we extend our analysis of the XRCC1-PNKP interaction taking into account the phosphorylation of XRCC1. We demonstrate that phosphorylated and non-phosphorylated XRCC1 interact with different regions of PNKP. Phosphorylated XRCC1 binds with high affinity (K(d) = 3.5 nM and 1 : 1 stoichiometry) to the forkhead associated (FHA) domain, while non-phosphorylated XRCC1 binds to the catalytic domain of PNKP with lower affinity (K(d) = 43.0 nM and 1 : 1 stoichiometry). Under conditions of limited enzyme concentration both forms of XRCC1 enhance the activities of PNKP, but the effect is more pronounced with phosphorylated XRCC1, particularly for the kinase activity of PNKP. The stimulatory effect of phosphorylated XRCC1 on PNKP can be totally inhibited by the presence of excess FHA domain polypeptide, but non-phosphorylated XRCC1 is not susceptible to competition by the FHA domain. Thus, XRCC1 can stimulate PNKP by two independent mechanisms.