The DNA strand breaks resulting from exposure to the free radicals generated by ionizing radiation or oxidizing agents are refractory to DNA repair synthesis because of deoxyribose fragments that block their 3' termini. The restoration of normal 3'-OH nucleotide primers is the essential first step in the excision repair of these radical-induced strand breaks. We have used a synthetic DNA substrate containing 3'-phosphoglycolaldehyde esters to identify and purify to physical homogeneity the major yeast diesterase that removes such nucleotide fragments. Yeast 3'-phosphoglycolaldehyde diesterase had Mr = 40,500 upon sodium dodecyl sulfate-polyacrylamide gel electrophoresis. A similar molecular weight estimate from gel filtration indicated that the active species is a nearly globular monomer. Purification of the enzyme removed a tightly bound metal, but the activity of the purified enzyme could be restored by the addition of Co2+, Mn2+, Ni2+, or Zn2+, with Co2+ the most effective cofactor. Even 3 microM Co2+ stimulated near-maximal activity, and this metal also conferred significant thermal stability on the purified protein. This is a novel enzyme, whose N-terminal amino acid sequence does not show any significant similarity to published sequences, and which is not the product of any gene in the RAD52 epistasis group.