It has previously been suggested that inhibition of the proofreading 3'-5' exonuclease activity of DNA polymerase may play an important role in generation of UV-induced mutations in Escherichia coli. Our previous work showing that overproduction of epsilon, the proofreading subunit of DNA polymerase III, counteracts the SOS mutagenic response of E. coli seemed to be consistent with this hypothesis. To explore further the nature of the antimutagenic effect of epsilon we constructed plasmid pMK17, which encodes only two of the three highly conserved segments of epsilon--ExoI and ExoII; the third segment, ExoIII, which is essential for 3'-5' exonuclease activity, is deleted. We show that at 40 degrees C, overproduction of the truncated epsilon subunit significantly delays production of M13 phage, suggesting that the protein retains its capacity to bind to DNA. On the other hand, the presence of pMK17 in a trpE65 strain growing at 40 degrees C causes a 10-fold decrease in the frequency of UV-induced Trp+ mutations. This antimutagenic effect of the truncated epsilon is effectively relieved by excess UmuD,C proteins. We also show that the presence of plasmid pIP21, which contains the dnaQ49 allele encoding an epsilon subunit that is defective in proofreading activity, almost completely prevents generation of UV-induced mutations in the trpE65 strain. We propose that the DNA binding ability of free epsilon, rather than its 3'-5' exonuclease activity, affects processing of premutagenic UV-induced lesions, possibly by interfering with the interaction between the UmuC-UmuD'-RecA complex and Pol III holoenzyme. This interaction is probably a necessary condition for translesion synthesis.