Flap endonuclease (FEN-1) removes 5' overhanging flaps in DNA repair and processes the 5' ends of Okazaki fragments in lagging strand DNA synthesis. The crystal structure of Pyrococcus furiosus FEN-1, active-site metal ions, and mutational information indicate interactions for the single- and double-stranded portions of the flap DNA substrate and identify an unusual DNA-binding motif. The enzyme's active-site structure suggests that DNA binding induces FEN-1 to clamp onto the cleavage junction to form the productive complex. The conserved FEN-1 C terminus binds proliferating cell nuclear antigen (PCNA) and positions FEN-1 to act primarily as an exonuclease in DNA replication, in contrast to its endonuclease activity in DNA repair. FEN-1 mutations altering PCNA binding should reduce activity during replication, likely causing DNA repeat expansions as seen in some cancers and genetic diseases.