Members of the structural maintenance of chromosome (SMC) family of proteins are essential regulators of genomic stability. In particular, the conserved Smc5-6 complex is required for efficient DNA repair, checkpoint signaling, and DNA replication in all eukaryotes. Despite these important functions, the actual nature of the DNA substrates recognized by the Smc5-6 complex in chromosomes is currently unknown. Furthermore, how the core SMC components of the Smc5-6 complex use their ATPase-driven mechanochemical activities to act on chromosomes is not understood. Here, we address these issues by purifying and defining the DNA-binding activity of Smc5. We show that Smc5 binds strongly and specifically to single-stranded DNA (ssDNA). Remarkably, this DNA-binding activity is independent of Smc6 and is observed with the monomeric form of Smc5. We further show that Smc5 ATPase activity is essential for its functions in vivo and that ATP regulates the association of Smc5 with its substrates in vitro. Finally, we demonstrate that Smc5 is able to bind efficiently to oligonucleotides consistent in size with ssDNA intermediates produced during DNA replication and repair. Collectively, our data on the DNA-binding activities of Smc5 provide a compelling molecular basis for the role of the Smc5-6 complex in the DNA damage response.