The RAD54 gene of Saccharomyces cerevisiae plays a crucial role in recombinational repair of double-strand breaks in DNA. Here the isolation and functional characterization of the RAD54 homolog of the fruit fly Drosophila melanogaster, DmRAD54, are described. The putative Dmrad54 protein displays 46 to 57% identity to its homologs from yeast and mammals. DmRAD54 RNA was detected at all stages of fly development, but an increased level was observed in early embryos and ovarian tissue. To determine the function of DmRAD54, a null mutant was isolated by random mutagenesis. DmRAD54-deficient flies develop normally, but the females are sterile. Early development appears normal, but the eggs do not hatch, indicating an essential role for DmRAD54 in development. The larvae of mutant flies are highly sensitive to X rays and methyl methanesulfonate. Moreover, this mutant is defective in X- ray-induced mitotic recombination as measured by a somatic mutation and recombination test. These phenotypes are consistent with a defect in the repair of double-strand breaks and imply that the RAD54 gene is crucial in repair and recombination in a multicellular organism. The results also indicate that the recombinational repair pathway is functionally conserved in evolution.