Polymorphisms and somatic mutations in Flap Endonuclease 1 (FEN1), an essential enzyme involved in DNA replication and repair, can lead to functional deficiencies of the FEN1 protein and a predisposition to cancer. We identified a FEN1 germline mutation that changed residue E359 to K in a patient whose family had a history of breast cancer. We determined that the E359K mutation, which is in the protein-protein domain of FEN1, abolished the interaction of FEN1 with Werner syndrome protein (WRN), an interaction that is critical for resolving stalled DNA replication forks. Furthermore, although the flap endonuclease activity of FEN1 E359K was unaffected, it failed to resolve bubble structures, which require the FEN1 gap-dependent endonuclease activity. To determine the etiological significance of E359K, we established a mouse model containing this mutation. E359K mouse embryonic fibroblasts (MEF) were more sensitive to DNA crosslinking agents that cause replication forks to stall. Cytological analysis suggested that the FEN1-WRN interaction was also required for telomere stability; mutant cell lines had fragile telomeres, increased numbers of spontaneous chromosomal anomalies and higher frequencies of transformation. Moreover, the incidence of cancer was significantly higher in mice homozygous for FEN1 E359K than in wild-type mice, suggesting that the FEN1 E359K mutation is oncogenic.