Proteins belonging to the highly conserved RecQ helicase family are essential for the maintenance of genomic stability. Here, we describe the biochemical properties of the human RECQ5beta protein. Like BLM and WRN, RECQ5beta is an ATP-dependent 3'-5' DNA helicase that can promote migration of Holliday junctions. However, RECQ5beta required the single-stranded DNA-binding protein RPA in order to mediate the efficient unwinding of oligonucleotide-based substrates. Surprisingly, we found that RECQ5beta possesses an intrinsic DNA strand-annealing activity that is inhibited by RPA. Analysis of deletion variants of RECQ5beta revealed that the DNA helicase activity resides in the conserved N-terminal portion of the protein, whereas strand annealing is mediated by the unique C-terminal domain. Moreover, the strand-annealing activity of RECQ5beta was strongly inhibited by ATPgammaS, a poorly hydrolyzable analog of ATP. This effect was alleviated by mutations in the ATP-binding motif of RECQ5beta, indicating that the ATP-bound form of the protein cannot promote strand annealing. This is the first demonstration of a DNA helicase with an intrinsic DNA strand-annealing function residing in a separate domain.