All the archaeal genomes sequenced to date contain a single Type 2 RNase H gene. We found that the genome of a halophilic archaeon, Halobacterium sp. NRC-1, contains an open reading frame with similarity to Type 1 RNase H. The protein encoded by the Vng0255c gene, possessed amino acid sequence identities of 33% with Escherichia coli RNase HI and 34% with a Bacillus subtilis RNase HI homologue. The B. subtilis RNase HI homologue, however, lacks amino acid sequences corresponding to a basic protrusion region of the E. coli RNase HI, and the Vng0255c has the similar deletion. As this deletion apparently conferred a complete loss of RNase H activity on the B. subtilis RNase HI homologue protein, the Vng0255c product was expected to exhibit no RNase H activity. However, the purified recombinant Vng0255c protein specifically cleaved an RNA strand of the RNA/DNA hybrid in vitro, and when the Vng0255c gene was expressed in an E. coli strain MIC2067 it could suppress the temperature-sensitive growth defect associated with the loss of RNase H enzymes of this strain. These results in vitro and in vivo strongly indicate that the Halobacterium Vng0255c is the first archaeal Type 1 RNase H. This enzyme, unlike other Type 1 RNases H, was able to cleave an Okazaki fragment-like substrate at the junction between the 3′-side of ribonucleotide and 5′-side of deoxyribonucleotide. It is likely that the archaeal Type 1 RNase H plays a role in the removal of the last ribonucleotide of the RNA primer from the Okazaki fragment during DNA replication.