Bloom's syndrome (BS) is a genetic disorder associated with short stature, fertility defects, and a predisposition to the development of cancer. BS cells are characterized by genomic instability; in particular, a high rate of reciprocal exchanges between sister-chromatids and homologous chromosomes. The BS gene product, BLM, is a helicase belonging to the highly conserved RecQ family. BLM is known to form a complex with the RAD51 recombinase, and to act upon DNA intermediates that form during homologous recombination, including D-loops and Holliday junctions. Here, we show that BLM also makes a direct physical association with the RAD51L3 protein (also known as RAD51D), a so-called RAD51 paralog that shows limited sequence similarity to RAD51 itself. This interaction is mediated through the N-terminal domain of BLM. To analyze functional interactions between BLM and RAD51L3, we have purified a heteromeric complex comprising RAD51L3 and a second RAD51 paralog, XRCC2. We show that the RAD51L3-XRCC2 complex stimulates BLM to disrupt synthetic 4-way junctions that model the Holliday junction. We also show that a truncated form of BLM, which retains helicase activity but is unable to bind RAD51L3, is not stimulated by the RAD51L3-XRCC2 complex. Our data indicate that the activity of BLM is modulated through an interaction with the RAD51L3-XRCC2 complex, and that this stimulatory effect on BLM is dependent upon a direct physical association between the BLM and RAD51L3 proteins. We propose that BLM co-operates with RAD51 paralogs during the late stages of homologous recombination processes that serve to restore productive DNA replication at sites of damaged or stalled replication forks.