The RNA polymerase II general transcription factor TFIIH is composed of several polypeptides. The observation that the largest subunit of TFIIH is the excision-repair protein XPB/ERCC3 (ref. 1), a helicase implicated in the human DNA-repair disorders xeroderma pigmentosum (XP) and Cockayne's syndrome, suggests a functional link between transcription and DNA repair. To understand the connection between these two cellular processes, we have extensively purified and functionally analysed TFIIH. We find that TFIIH has a dual role, being required for basal transcription of class II genes and for participation in DNA-excision repair. TFIIH is shown to complement three different cell extracts deficient in excision repair: XPB/ERCC3, XPC and XPD/ERCC2. The complementation of XPB and XPD is a consequence of ERCC3 and ERCC2 being integral subunits of TFIIH, whereas complementation of XPC is due to an association of this polypeptide with TFIIH. We found that the general transcription factor IIE negatively modulates the helicase activity of TFIIH through a direct interaction between TFIIE and the ERCC3 subunit of TFIIH.