Rad50 and Mre11 form a complex involved in the detection and processing of DNA double strand breaks. Rad50 contains an anti-parallel coiled-coil with two absolutely conserved cysteine residues at its apex. These cysteine residues serve as a dimerization domain and bind a Zn(2+) cation in a tetrathiolate coordination complex known as the zinc-hook. Mutation of the zinc-hook in bacteriophage T4 is lethal, indicating the ability to bind Zn(2+) is critical for the functioning of the MR complex. In vitro, we found that complex formation between Rad50 and a peptide corresponding to the C-terminal domain of Mre11 enhances the ATPase activity of Rad50, supporting the hypothesis that the coiled-coil is a major conduit for communication between Mre11 and Rad50. We constructed mutations to perturb this domain in the bacteriophage T4 Rad50 homolog. Deletion of the Rad50 coiled-coil and zinc-hook eliminates Mre11 binding and ATPase activation but does not affect its basal activity. Mutation of the zinc-hook or disruption of the coiled-coil does not affect Mre11 or DNA binding, but their activation of Rad50 ATPase activity is abolished. Although these mutants excise a single nucleotide at a normal rate, they lack processivity and have reduced repetitive exonuclease rates. Restricting the mobility of the coiled-coil eliminates ATPase activation and repetitive exonuclease activity, but the ability to support single nucleotide excision is retained. These results suggest that the coiled-coiled domain adopts at least two conformations throughout the ATPase/nuclease cycle, with one conformation supporting enhanced ATPase activity and processivity and the other supporting nucleotide excision.