A rare genetic disease, Fanconi anemia (FA), now attracts broader attention from cancer biologists and basic researchers in the DNA repair and ubiquitin biology fields as well as from hematologists. FA is a chromosome instability syndrome characterized by childhood-onset aplastic anemia, cancer or leukemia susceptibility, and cellular hypersensitivity to DNA crosslinking agents. Identification of 11 genes for FA has led to progress in the molecular understanding of this disease. FA proteins, including a ubiquitin ligase (FANCL), a monoubiquitinated protein (FANCD2), a helicase (FANCJ/BACH1/BRIP1), and a breast/ovarian cancer susceptibility protein (FANCD1/BRCA2), appear to cooperate in a pathway leading to the recognition and repair of damaged DNA. Molecular interactions among FA proteins and responsible proteins for other chromosome instability syndromes (BLM, NBS1, MRE11, ATM, and ATR) have also been found. Furthermore, inactivation of FA genes has been observed in a wide variety of human cancers in the general population. These findings have broad implications for predicting the sensitivity and resistance of tumors to widely used anticancer DNA crosslinking agents (cisplatin, mitomycin C, and melphalan). Here, we summarize recent progress in the molecular biology of FA and discuss roles of the FA proteins in DNA repair and cancer biology.