The XPD helicase is a central component of the general transcription factor TFIIH which plays major roles in transcription and nucleotide excision repair (NER). Here we present the high-resolution crystal structure of the Arch domain of XPD with its interaction partner MAT1, a central component of the CDK activating kinase complex. The analysis of the interface led to the identification of amino acid residues that are crucial for the MAT1-XPD interaction. More importantly, mutagenesis of the Arch domain revealed that these residues are essential for the regulation of (i) NER activity by either impairing XPD helicase activity or the interaction of XPD with XPG; (ii) the phosphorylation of the RNA polymerase II and RNA synthesis. Our results reveal how MAT1 shields these functionally important residues thereby providing insights into how XPD is regulated by MAT1 and defining the Arch domain as a major mechanistic player within the XPD scaffold.