We have carried out a domain analysis of POL32, the third subunit of Saccharomyces cerevisiae DNA polymerase δ (Pol δ). Interactions with POL31, the second subunit of Pol δ, are specified by the amino-terminal 92 amino acids, whereas interactions with the replication clamp proliferating cell nuclear antigen (PCNA, POL30) reside at the extreme carboxyl-terminal region. Pol32 binding, in vivo and in vitro, to the large subunit of DNA polymerase α, POL1, requires the carboxyl-proximal region of Pol32. The amino-terminal region of Pol32 is essential for damage-induced mutagenesis. However, the presence of its carboxyl-terminal PCNA-binding domain enhances the efficiency of mutagenesis, particularly at high loads of DNA damage. In vitro, in the absence of effector DNA, the PCNA-binding domain of Pol32 is essential for PCNA-Pol δ interactions. However, this domain has minimal importance for processive DNA synthesis by the ternary DNA-PCNA-Pol δ complex. Rather, processivity is determined by PCNA-binding domains located in the Pol3 and/or Pol31 subunits. Using diagnostic PCNA mutants, we show that during DNA synthesis the carboxyl-terminal domain of Pol32 interacts with the carboxyl-terminal region of PCNA, whereas interactions of the other subunit(s) of Pol δ localize largely to a hydrophobic pocket at the interdomain connector loop region of PCNA.