Helicases often achieve functional specificity through utilization of unique structural features incorporated into an otherwise conserved core. The archaeal Rad3 (xeroderma pigmentosum group D protein (XPD)) helicase is a prototypical member of the Rad3 family, distinct from other related (superfamily II) SF2 enzymes because of a unique insertion containing an iron-sulfur (FeS) cluster. This insertion may represent an auxiliary domain responsible for modifying helicase activity or for conferring specificity for selected DNA repair intermediates. The importance of the FeS cluster for the fine-tuning of Rad3-DNA interactions is illustrated by several clinically relevant point mutations in the FeS domain of human Bach1 (FancJ) and XPD helicases that result in distinct disease phenotypes. Here we analyzed the substrate specificity of the Rad3 (XPD) helicase from Ferroplasma acidarmanus (FacRad3) and probed the importance of the FeS cluster for Rad3-DNA interactions. We found that the FeS cluster stabilizes secondary structure of the auxiliary domain important for coupling of single-stranded (ss) DNA-dependent ATP hydrolysis to ssDNA translocation. Additionally, we observed specific quenching of the Cy5 fluorescent dye when the FeS cluster of a bound helicase is positioned in close proximity to a Cy5 fluorophore incorporated into the DNA molecule. Taking advantage of this Cy5 quenching, we developed an equilibrium assay for analysis of the Rad3 interactions with various DNA substrates. We determined that the FeS cluster-containing domain recognizes the ssDNA-double-stranded DNA junction and positions the helicase in an orientation consistent with duplex unwinding. Although it interacts specifically with the junction, the enzyme binds tightly to ssDNA, and the single-stranded regions of the substrate are the major contributors to the energetics of FacRad3-substrate interactions.