Rad54 is an ATP-driven translocase involved in the genome maintenance pathway of homologous recombination (HR). Although its activity has been implicated in several steps of HR, its exact role(s) at each step are still not fully understood. We have identified a new interaction between Rad54 and the replicative DNA clamp, proliferating cell nuclear antigen (PCNA). This interaction was only mildly weakened by the mutation of two key hydrophobic residues in the highly-conserved PCNA interaction motif (PIP-box) of Rad54 (Rad54-AA). Intriguingly, the rad54-AA mutant cells displayed sensitivity to DNA damage and showed HR defects similar to the null mutant, despite retaining its ability to interact with HR proteins and to be recruited to HR foci in vivo. We therefore surmised that the PCNA interaction might be impaired in vivo and was unable to promote repair synthesis during HR. Indeed, the Rad54-AA mutant was defective in primer extension at the MAT locus as well as in vitro, but additional biochemical analysis revealed that this mutant also had diminished ATPase activity and an inability to promote D-loop formation. Further mutational analysis of the putative PIP-box uncovered that other phenotypically relevant mutants in this domain also resulted in a loss of ATPase activity. Therefore, we have found that although Rad54 interacts with PCNA, the PIP-box motif likely plays only a minor role in stabilizing the PCNA interaction, and rather, this conserved domain is probably an extension of the ATPase domain III.