Two RecA orthologs, Rad51 and Dmc1, mediate homologous recombination in meiotic cells. During budding yeast meiosis, Hed1 coordinates the actions of Rad51 and Dmc1 by down-regulating Rad51 activity. It is thought that Hed1-dependent attenuation of Rad51 facilitates formation of crossovers that are necessary for the correct segregation of chromosomes at the first meiotic division. We purified Hed1 in order to elucidate its mechanism of action. Hed1 binds Rad51 with high affinity and specificity. We show that Hed1 does not adversely affect assembly of the Rad51 presynaptic filament, but it specifically prohibits interaction of Rad51 with Rad54, a Swi2/Snf2-like factor that is indispensable for Rad51-mediated recombination. In congruence with the biochemical results, Hed1 prevents the recruitment of Rad54 to a site-specific DNA double-strand break in vivo but has no effect on the recruitment of Rad51. These findings shed light on the function of Hed1 and, importantly, unveil a novel mechanism for the regulation of homologous recombination.