There are at least four distinct families of enzymes that recognize and remove uracil from DNA. Family-3 (SMUG1) enzymes have recently been identified and have a preference for uracil in single-stranded DNA when assayed in vitro. Here we investigate the in vivo function of SMUG1 using the yeast Saccharomyces cerevisiae as a model system. These organisms lack a SMUG1 homologue and use a single enzyme, Ung1 to carry out uracil-repair. When a wild-type strain is treated with antifolate agents to induce uracil misincorporation into DNA, S-phase arrest and cellular toxicity occurs. The arrest is characteristic of checkpoint activation due to single-strand breaks caused by continuous uracil removal and self-defeating DNA repair. When uracil-DNA glycosylase is deleted (deltaung1), cells continue through S-phase and arrest at G(2)/M, presumably due to the effects of stable uracil misincorporation in DNA. Pulsed field gel electrophoresis (PFGE) demonstrates that cells are able to complete DNA replication with uracil-substituted DNA and do not experience the extensive strand breakage attributed to uracil-DNA glycosylase-mediated repair. As a result, these cells experience early protection from antifolate-induced cytotoxicity. When either UNG1 or SMUG1 functions are reintroduced back into the null strain and then subjected to antifolate treatment, the cells revert back to the wild-type phenotype as shown by a restored sensitivity to drug and S-phase arrest. The arrest is accompanied by the accumulation of replication intermediates as determined by PFGE. Collectively, these data indicate that SMUG1 can act as a functional homolog of the family-1 uracil-DNA glycosylase enzymes.