Escherichia coli alkB mutants are very sensitive to DNA methylating agents. Despite these mutants being the subject of many studies, no DNA repair or other function has been assigned to the AlkB protein or to its human homolog. Here, we report that reactivation of methylmethanesulfonate (MMS)-treated single-stranded DNA phages, M13, f1, and G4, was decreased dramatically in alkB mutants. No such decrease occurred when using methylated lambda phage or M13 duplex DNA. These data show that alkB mutants have a marked defect in processing methylation damage in single-stranded DNA. Recombinant AlkB protein bound more efficiently to single- than double-stranded DNA. The single-strand damage processed by AlkB was primarily cytotoxic and not mutagenic and was induced by SN2 methylating agents, MMS, DMS, and MeI but not by SN1 agent N-methyl-N-nitrosourea or by gamma irradiation. Strains lacking other DNA repair activities, alkA tag, xth nfo, uvrA, mutS, and umuC, were not defective in reactivation of methylated M13 phage and did not enhance the defect of an alkB mutant. A recA mutation caused a small but additive defect. Thus, AlkB functions in a novel pathway independent of these activities. We propose that AlkB acts on alkylated single-stranded DNA in replication forks or at transcribed regions. Consistent with this theory, stationary phase alkB cells were less MMS sensitive than rapidly growing cells.