Dna2 nuclease/helicase is a multitasking protein involved in DNA replication and recombinational repair, and it is important for preservation of genomic stability. Yeast Dna2 protein contains a conserved putative Fe-S (iron-sulfur) cluster signature motif spanning the nuclease active site. We show that this motif is indeed an Fe-S cluster domain. Mutation of cysteines involved in metal coordination greatly reduces not just the nuclease activity but also the ATPase activity of Dna2, suggesting that the nuclease and helicase activities are coupled. The affinity for DNA is not significantly reduced, but binding mode in the C to A mutants is altered. Remarkably, a point mutation (P504S), proximal to the Fe-S cluster domain, which renders cells temperature sensitive, closely mimics the global defects of the Fe-S cluster mutation itself. This points to an important role of this conserved proline residue in stabilizing the Fe-S cluster. The C to A mutants are deficient in DNA replication and repair in vivo, and, strikingly, the degree to which they are defective correlates directly with degree of loss of enzymatic activity. Taken together with previous results showing that mutations in the ATP domain affect nuclease function, our results provide a new mechanistic paradigm for coupling between nuclease and helicase modules fused in the same polypeptide.