DNA replication and transcription are affected adversely by the presence of bulky adducts that are generated by the covalent binding of a variety of metabolically activated environmental pollutants to cellular DNA. When these lesions are not cleared by cellular repair enzymes prior to replication, mutations and ultimately tumor initiation can occur. Transcription and DNA repair appear to be intimately connected, since certain adducts are more efficiently removed from the transcribed strands of active loci than from non-transcribed strands and other quiescent domains in the genome. The mechanism by which RNA polymerases deal with bulky adducts during DNA transcription is therefore of great interest. The availability of site-specifically modified and stereochemically defined oligodeoxyribonucleotides derived from the covalent reaction of 7r, 8t-dihydroxy-9, 10t-epoxy- 7,8,9,10-tetrahydrobenzo[a]pyrene (anti-BPDE) with guanine residues prompted us to study the efficiencies of transcription past these lesions using bacteriophage T7 RNA polymerase. We show here that T7 RNA polymerase can bypass such lesions in a DNA template, providing that a cytosine residue is incorporated opposite anti-BPDE-modified guanine. However, when an incorrect base (most frequently a purine) is inserted opposite the modified site, the RNA polymerase stalls, and the complex dissociates, resulting in a truncated transcript. The ability of the T7 RNA polymerase to discriminate between a correct and an incorrect inserted base and, accordingly, to continue or terminate transcription, might constitute an important mechanism that ensures the fidelity of transcription past a modified base present on the transcribed strand of the DNA template.