We have examined the effect of thioredoxin, an accessory protein that confers high processivity to bacteriophage T7 DNA polymerase, on the fidelity of DNA synthesis. In the presence of thioredoxin, exonuclease-proficient T7 DNA polymerase is highly accurate. In fidelity assays that score errors that revert M13mp2 lacZ alpha-complementation mutants, error rates are < or = 2.2 x 10(-6) for base substitution and < or = 3.7 x 10(-7) and < or = 4.5 x 10(-7) for frameshifts that revert mutations in the +1 and -1 reading frames, respectively. Rates are more than 10-fold higher during synthesis by polymerase.thioredoxin complex lacking 3'-->5' exonuclease activity, demonstrating that frameshift as well as substitution errors are subject to proofreading. The contribution of thioredoxin to accuracy has been examined by comparing the fidelity of the exonuclease-deficient polymerase in the presence or absence of the accessory protein. Thioredoxin either enhances or reduces fidelity, depending on the type of error considered. In the absence of thioredoxin, T7 DNA polymerase is 3-fold more accurate for base substitutions and > or = 27-fold and 9-fold more accurate, respectively, for 1- and 2-nt deletion errors at nonreiterated nucleotide sequences. Higher fidelity for all three errors may reflect the inability of the polymerase to continue synthesis from the premutational intermediates in the absence of the accessory protein. In marked contrast, the rate for frameshift errors wherein one or more nucleotides has been added to a repeated DNA sequence increases 46-fold when thioredoxin is absent from the polymerization reaction. The error rate increases as the length of the repeated sequence increases, consistent with a model where strand slippage creates misaligned template-primers. Thus, replicative expansion of repetitive sequences occurs in the absence of a replication accessory protein.