We cloned the Saccharomyces cerevisiae homologue of mammalian RNase HI, which itself is related to the prokaryotic RNase HII, an enzyme of unknown function and previously described as having minor activity in Escherichia coli. Expression of the corresponding yeast 35 kDa protein (named by us RNase H(35)) in E. coli and immunological analysis proves a close evolutionary relationship to mammalian RNase HI. Deletion of the gene (called RNH35) from the yeast genome leads to an about 75% decrease of RNase H activity in preparations from the mutated, still viable cells. Sequence comparison discriminates this new yeast RNase H from earlier described yeast enzymes, RNase H(70) and RNase HI.