The family of RecQ DNA helicases plays an important role in the maintenance of genomic integrity. Mutations in three of the five known RecQ family members in humans, BLM, WRN and RecQ4, lead to disorders that are characterized by predisposition to cancer and premature aging.To address the in vivo functions of Drosophila RecQ4 (dRecQ4), we generated mutant alleles of dRecQ4 using the targeted gene knock-out technique. Our data show that dRecQ4 mutants are homozygous lethal with defects in DNA replication, cell cycle progression and cell proliferation. Two sets of experiments suggest that dRecQ4 also plays a role in DNA double strand break repair. First, mutant animals exhibit sensitivity to gamma irradiation. Second, the efficiency of DsRed reconstitution via single strand annealing repair is significantly reduced in the dRecQ4 mutant animals. Rescue experiments further show that both the N-terminal domain and the helicase domain are essential to dRecQ4 function in vivo. The N-terminal domain is sufficient for the DNA repair function of dRecQ4.Together, our results show that dRecQ4 is an essential gene that plays an important role in not only DNA replication but also DNA repair and cell cycle progression in vivo.