Yeast cells from a wild type or protease-deficient strain were lysed in the absence or presence of protease inhibitors and the extracts analyzed by analytical high pressure liquid chromatography on diethylaminoethyl silica gel. Conditions that inhibited protease action caused elution of a novel DNA polymerase activity at a position in the gradient distinct from the elution positions of both DNA polymerase I and II. In large scale purifications, this DNA polymerase, called DNA polymerase III, copurified with a single-stranded DNA dependent 3'-5' exonuclease activity, exonuclease III, to near homogeneity. Glycerol gradient centrifugation partially dissociated the complex to yield two peaks of exonuclease III activity, one at 7.7 S together with the DNA polymerase, and one at 4.0 S without polymerase activity. Gel filtration indicated that the complex has a molecular mass greater than 400 kDa. Polyacrylamide gel electrophoresis in the presence of sodium dodecyl sulfate indicated that the complex consists of several subunits: 140, 62, 55, and 53 kilodaltons, some of which may be proteolysis products. The exonuclease component of the complex can excise single nucleotide mismatches providing a base-paired primer-template which can be elongated by the DNA polymerase. Under replication conditions, the complex exhibits a measurable turnover rate of dTTP to dTMP and it contains no primase activity. The enzymatic activities of the 3'-5' exonuclease are consistent with a proofreading function during in vivo DNA replication. A second exonuclease activity, exonuclease IV, separated from the complex late in the purification scheme. It degrades both single-stranded and double-stranded DNA in the 5'----3' direction.