The only established physiological function of the V(D)J recombinase, comprising RAG1 and RAG2, is to perform DNA cleavage. The molecular roles of RAG2 in cleavage, the mechanisms used to join the broken DNA ends, and the identity of nuclease(s) that open the hairpin coding ends have been unknown. Site-directed mutagenesis targeting each conserved basic amino acid in RAG2 revealed several separation-of-function mutants that address these questions. Analysis of these mutants reveals that RAG2 helps recognize or cleave distorted DNA intermediates and plays an essential role in the joining step of V(D)J recombination. Moreover, the discovery that some mutants block RAG-mediated hairpin opening in vitro provides a critical link between this biochemical activity and coding joint formation in vivo.