Deletion of the Saccharomyces cerevisiae TOP3 gene, encoding Top3p, leads to a slow-growth phenotype characterized by an accumulation of cells with a late S/G2 content of DNA (S. Gangloff, J. P. McDonald, C. Bendixen, L. Arthur, and R. Rothstein, Mol. Cell. Biol. 14:8391-8398, 1994). We have investigated the function of TOP3 during cell cycle progression and the molecular basis for the cell cycle delay seen in top3Delta strains. We show that top3Delta mutants exhibit a RAD24-dependent delay in the G2 phase, suggesting a possible role for Top3p in the resolution of abnormal DNA structures or DNA damage arising during S phase. Consistent with this notion, top3Delta strains are sensitive to killing by a variety of DNA-damaging agents, including UV light and the alkylating agent methyl methanesulfonate, and are partially defective in the intra-S-phase checkpoint that slows the rate of S-phase progression following exposure to DNA-damaging agents. This S-phase checkpoint defect is associated with a defect in phosphorylation of Rad53p, indicating that, in the absence of Top3p, the efficiency of sensing the existence of DNA damage or signaling to the Rad53 kinase is impaired. Consistent with a role for Top3p specifically during S phase, top3Delta mutants are sensitive to the replication inhibitor hydroxyurea, expression of the TOP3 mRNA is activated in late G1 phase, and DNA damage checkpoints operating outside of S phase are unaffected by deletion of TOP3. All of these phenotypic consequences of loss of Top3p function are at least partially suppressed by deletion of SGS1, the yeast homologue of the human Bloom's and Werner's syndrome genes. These data implicate Top3p and, by inference, Sgs1p in an S-phase-specific role in the cellular response to DNA damage. A model proposing a role for these proteins in S phase is presented.