We discovered a thermostable enzyme from the archaeon Pyrococcus furiosus (Pfu), which increases yields of PCR product amplified with Pfu DNA polymerase. A high molecular mass (>250 kDa) complex with PCR-enhancing activity was purified from Pfu extracts. The complex is a multimer of two discrete proteins, P45 and P50, with significant similarity to bacterial dCTP deaminase/dUTPase and DNA flavoprotein, respectively. When tested in PCR, only recombinant P45 exhibited enhancing activity. P45 was shown to function as a dUTPase, converting dUTP to dUMP and inorganic pyrophosphate. Pfu dUTPase improves the yield of products amplified with Pfu DNA polymerase by preventing dUTP incorporation and subsequent inhibition of the polymerase by dU-containing DNA. dUTP was found to accumulate during PCR through dCTP deamination and to limit the efficiency of PCRs carried out with archaeal DNA polymerases. In the absence of dUTP inhibition, the combination of cloned Pfu DNA polymerase and Pfu dUTPase (PfuTurbo DNA polymerase) can amplify longer targets in higher yield than Taq DNA polymerase. In vivo, archaeal dUTPases may play an essential role in preventing dUTP incorporation and inhibition of DNA synthesis by family B DNA polymerases.