Recently a family X DNA polymerase (PolXDr) was identified in the radioresistant bacterium Deinococcus radiodurans. Knockout cells show a delay in double-strand break repair (DSBR) and an increased sensitivity to gamma-irradiation. Here we show that PolXDr possesses 3'-->5' exonuclease activity that stops cutting close to a loop. PolXDr consists of a DNA polymerase X domain (PolXc) and a Polymerase and Histidinol Phosphatase (PHP) domain. Deletion of the PHP domain abolishes only the structure-modulated but not the canonical 3'-->5' exonuclease activity. Thus, the exonuclease resides in the PolXc domain, but the structure-specificity requires additionally the PHP domain. Mutation of two conserved glycines in the PolXc domain leads to a specific loss of the structure-modulated exonuclease activity but not the exonuclease activity in general. The PHP domain itself does not show any activity. PolXDr is the first family X DNA polymerase that harbours an exonuclease activity. The wild-type protein, the glycine mutant and the two domains were expressed separately in DeltapolXDr cells. The wild-type protein could restore the radiation resistance, whereas intriguingly the mutant proteins showed a significant negative effect on survival of gamma-irradiated cells. Taken together our in vivo results suggest that both PolXDr domains play important roles in DSBR in D. radiodurans.