Dna2 can efficiently process 5' flaps containing DNA secondary structure using coordinated action of the three biochemical activities: the N-terminally encoded DNA-binding activity and the C-terminally encoded endonuclease and helicase activities. In this study, we investigated the cross talk among the three functional domains using a variety of dna2 mutant alleles and enzymes derived thereof. We found that disruption of the catalytic activities of Dna2 activated Dna2-dependent checkpoint, residing in the N-terminal domain. This checkpoint activity contributed to growth defects of dna2 catalytic mutants, revealing the presence of an intramolecular functional cross talk in Dna2. The N-terminal domain of Dna2 bound specifically to substrates that mimic DNA replication fork intermediates, including Holliday junctions. Using site-directed mutagenesis of the N-terminal domain of Dna2, we discovered that five consecutive basic amino acid residues were essential for the ability of Dna2 to bind hairpin DNA in vitro. Mutant cells expressing the dna2 allele containing all five basic residues substituted with alanine displayed three distinct phenotypes: (i) temperature-sensitive growth defects, (ii) bypass of S-phase arrest, and (iii) increased sensitivity to DNA-damaging agents. Taken together, our results indicate that the interplay between the N-terminal regulatory and C-terminal catalytic domains of Dna2 plays an important role in vivo, especially when cells are placed under replication stress.