To address the different functions of Pol delta and FEN1 (Rad27) in Okazaki fragment maturation, exonuclease-deficient polymerase Pol delta-01 and Pol delta-5DV (corresponding to alleles pol3-01-(D321A, E323A) and pol3-5DV-(D520V), respectively) were purified and characterized in this process. In the presence of the replication clamp PCNA, both wild-type and exo(-) Pol delta carried out strand displacement synthesis with similar rates; however, initiation of strand displacement synthesis was much more efficient with Pol delta-exo(-). When Pol delta-exo(-) encountered a downstream primer, it paused with 3-5 nucleotides of the primer displaced, whereas the wild type carried out precise gap filling. Consequently, in the absence of FEN1, Pol delta exonuclease activity was essential for closure of simple gaps by DNA ligase. Compared with wild type, Okazaki fragment maturation with Pol delta-exo(-) proceeded with an increased duration of nick translation prior to ligation. Maturation was efficient in the absence of Dna2 and required Dna2 only when FEN1 activity was compromised. In agreement with these results, the proposed generation of double strand breaks in pol3-exo(-) rad27 mutants was suppressed by the overexpression of DNA2. Further genetic studies showed that pol3-exo(-) rad27 double mutants were sensitive to alkylation damage consistent with an in vivo defect in gap filling by exonuclease-deficient Pol delta.