Flap endonuclease 1 (FEN1) is a structure-specific nuclease that cleaves substrates containing unannealed 5'-flaps during Okazaki fragment processing. Cleavage removes the flap at or near the point of annealing. The preferred substrate for archaeal FEN1 or the 5'-nuclease domains of bacterial DNA polymerases is a double-flap structure containing a 3'-tail on the upstream primer adjacent to the 5'-flap. We report that FEN1 in Saccharomyces cerevisiae (Rad27p) exhibits a similar specificity. Cleavage was most efficient when the upstream primer contained a 1-nucleotide 3'-tail as compared with the fully annealed upstream primer traditionally tested. The site of cleavage was exclusively at a position one nucleotide into the annealed region, allowing human DNA ligase I to seal all resulting nicks. In contrast, a portion of the products from traditional flap substrates is not ligated. The 3'-OH of the upstream primer is not critical for double-flap recognition, because Rad27p is tolerant of modifications. However, the positioning of the 3'-nucleotide defines the site of cleavage. We have tested substrates having complementary tails that equilibrate to many structures by branch migration. FEN1 only cleaved those containing a 1-nucleotide 3'-tail. Equilibrating substrates containing 12-ribonucleotides at the end of the 5'-flap simulates the situation in vivo. Rad27p cleaves this substrate in the expected 1-nucleotide 3'-tail configuration. Overall, these results suggest that the double-flap substrate is formed and cleaved during eukaryotic DNA replication in vivo.