Summary Drosophila topoisomerase (topo) III beta is a member of the type IA family of DNA topoisomerases which generates a single-stranded break to form a covalent complex with the 5' end of DNA. We show here that a purified preparation of topo III beta is able to convert a hypernegatively supercoiled substrate into primarily nicked, but also linear DNA at enzyme to DNA molar ratios of 5:1 or greater. While the optimal temperature for the relaxation activity is between 37 and 45-dgree C, maximal cleavage occurs between 23 and 30-degree C, a temperature range which is more physiologically relevant for fruit flies. The cleavage products require protease treatment to enter the gel, are stable over time, reversible, and are not observed with a Y332F active site mutant, further supporting the idea that topo III beta possesses an endonucleolytic cleavage activity. This cleavage activity appears to be specific for highly unwound, or single-strand containing substrates. Southern blot analysis of the cleavage products demonstrates the topo III beta cleavage activity is primarily concentrated in highly A/T-rich regions. These results suggest topo III beta may function as a reversible endonuclease in vivo by recognizing and cleaving/rejoining DNA structures with single-stranded character.