The Y family DNA polymerase yeast pol eta inserts pyrene deoxyribose monophosphate (dPMP) in preference to A opposite an abasic site, the 3'-T of a thymine dimer, and a normal T with almost equal efficiency. In contrast, pol A family polymerases such as Klenow fragment and T7 DNA polymerase only insert dPMP efficiently opposite an abasic site and the 3'-T of a thymine dimer but not opposite undamaged DNA. Pyrene nucleotide is also an efficient chain-terminating inhibitor of DNA synthesis by pol eta but not by Klenow fragment or T7 DNA polymerase. To better understand the origin of the efficiency and sequence specificity of dPMP insertion by pol eta, the kinetics of dPMP insertion opposite various templates have been determined. In one sequence context, the efficiency of dPMP insertion increases 4.6-fold opposite G < A << T < C, suggesting that the templating nucleotide modulates dPMP insertion efficiency by having to destack prior to dPTP binding. The efficiency of insertion of dPMP opposite T in the same sequence context increases 7-fold for primers terminating in G < A < C < T and is similar to that observed for nontemplated blunt-end extension, suggesting that stacking interactions between the pyrene and the primer terminus are also important. On heterogeneous templates, the average selectivity for dPMP insertion relative to the complementary dNMP decreases in the order of dAMP > dGMP > dTMP > dCMP, from a high of 5.8 when dAMP is to be inserted following a T to a low of 0.5 when dCMP is to be inserted following a C. The relative preference for dPMP insertion at a given site can be largely explained by the energetic cost of destacking the templating base and stacking of pyrene nucleotide relative to that of stacking and base pairing the complementary nucleotide. Thus, pyrene nucleotide represents a novel class of nucleotide-based chain-terminating DNA synthesis inhibitors whose base portion consists of a hydrophobic, non-hydrogen bonding, base-pair mimic.