In eukaryotes, the nuclease activity of Rad27p (Fen1p) is thought to play a critical role in lagging-strand DNA replication by removing ribonucleotides present at the 5' ends of Okazaki fragments. Genetic analysis of Saccharomyces cerevisiae also has identified a role for Rad27p in mutation avoidance. rad27Delta mutants display both a repeat tract instability phenotype and a high rate of forward mutations to canavanine resistance that result primarily from duplications of DNA sequences that are flanked by direct repeats. These observations suggested that Rad27p activities in DNA replication and repair could be altered by mutagenesis and specifically assayed. To test this idea, we analyzed two rad27 alleles, rad27-G67S and rad27-G240D, that were identified in a screen for mutants that displayed repeat tract instability and mutator phenotypes. In chromosome stability assays, rad27-G67S strains displayed a higher frequency of repeat tract instabilities relative to CAN1 duplication events; in contrast, the rad27-G240D strains displayed the opposite phenotype. In biochemical assays, rad27-G67Sp displayed a weak exonuclease activity but significant single- and double-flap endonuclease activities. In contrast, rad27-G240Dp displayed a significant double-flap endonuclease activity but was devoid of exonuclease activity and showed only a weak single-flap endonuclease activity. Based on these observations, we hypothesize that the rad27-G67S mutant phenotypes resulted largely from specific defects in nuclease function that are important for degrading bubble intermediates, which can lead to DNA slippage events. The rad27-G240D mutant phenotypes were more difficult to reconcile to a specific biochemical defect, suggesting a structural role for Rad27p in DNA replication and repair. Since the mutants provide the means to relate nuclease functions in vitro to genetic characteristics in vivo, they are valuable tools for further analyses of the diverse biological roles of Rad27p.