We report here evidence for the mechanism of nuclear localization of XPG nuclease in human cells. Several candidate nuclear localization signal (NLS) peptides have been proposed for XPG protein. We have identified XPG peptides containing functional NLS and a potential nuclear retention signal (NRS) using in situ immunofluorescene localization of transiently expressed beta-galactosidase fusion proteins. Two XPG regions with putative NLS [amino acid (AA) coordinates: NLS-B (AA 1057-1074) and NLS-C (AA 1171-1185)] were each shown to independently localize the beta-gal extensively (> 80%) to the nucleus of HeLa cells. The C-terminus peptide containing NLS-C, an NLS conserved evolutionarily between yeasts and humans, also directed sub-localization of beta-galactosidase to intranuclear foci reminiscent of native XPG protein, as well as to peri-nucleolar regions. Peptides in the putative XPG 'NLS domain' (AA approximately 1051-1185) apparently function in concert for nuclear localization and also for retention of XPG in nuclear matrix-associated foci. Evidence presented elsewhere (Park et al., 1995) indicates that the peptide containing NLS-C (AA 1146-1185) also regulates the dynamic localization of XPG in the nucleus following UV-irradiation.