Gene 6 protein of bacteriophage T7 has 5′-3′-exonuclease activity specific for duplex DNA. We have found that gene 6 protein also has flap endonuclease activity. The flap endonuclease activity is considerably weaker than the exonuclease activity. Unlike the human homolog of gene 6 protein, the flap endonuclease activity of gene 6 protein is dependent on the length of the 5′-flap. This dependency of activity on the length of the 5′-flap may result from the structured helical gateway region of gene 6 protein which differs from that of human flap endonuclease 1. The flap endonuclease activity provides a mechanism by which RNA-terminated Okazaki fragments, displaced by the lagging strand DNA polymerase, are processed. 3′-extensions generated during degradation of duplex DNA by the exonuclease activity of gene 6 protein are inhibitory to further degradation of the 5′-terminus by the exonuclease activity of gene 6 protein. The single-stranded DNA binding protein of T7 overcomes this inhibition.