Works for me, sort of. At least it gets rid of all the newlines leaving

'AAGTAATCAAGTATTACAAGAAACAAAAATTCAAGTAAATAACAGATAATATGTCAAAAGCTGTCGGTA
+TTGATTTAGGTACAACATACTCGTGTGTTGC>YDR256CCTA
1969666970216GGGAAGAACTAAGAGATGTTATGGCTCGGAGAGTTTTGAAAAGCGAAATAGATTCGC
+TGCAAGTTTGTGAAGAAACCATCGACAAGAATTACAAGGTTAT';
[download]

What are you seeing? If you just want to compress multiple newlines, you could use $str =~ y/\n//s; If there are space characters on the "blank" line, you'd want something like $str =~ s/^\s+//mg; (or $str =~ s/^\s+\n//mg; if there may be spaces at the start of a non-blank line).