Bacillus amyloliquefaciens cells were found to contain an exonuclease which catalyzes the sequential hydrolysis of mononucleotides from the 3'-termini of duplex DNA. The enzyme was purified to homogeneity and its molecular weight (as determined by polyacrylamide gel electrophoresis in the presence of sodium dodecyl sulfate) is 29,000. The exonuclease possesses an additional catalytic activity, i.e., 3'-5' exonuclease specific for the RNA strand in an RNA--DNA hybrid duplex (RNase H activity). In terms of physical and catalytic properties the exonuclease of B. amyloliquefaciens is similar to exonucleases III from E. coli and Haemophilus influenzae and can thus be related to the same class of hydrolases, i.e., 3.1.11.2. However, in comparison with exo III from E. coli, the enzyme from B. amyloliquefaciens exhibits a more strict specificity for the structure of the substrate 3'-end.