Incorporation of the anticancer drug fludarabine (9-beta-D-arabinofuranosyl-2-fluoroadenine 5'-monophosphate; F-ara-AMP) into the 3'-end of DNA during replication causes termination of DNA strand elongation and is strongly correlated with loss of clonogenicity. Because the proofreading mechanisms that remove 3'-F-ara-AMP from DNA represent a possible means of resistance to the drug, the present study investigated the excision of incorporated F-ara-AMP from DNA by the 3' --> 5'-exonuclease activity of DNA polymerase epsilon from human leukemia CEM cells. Using the drug-containing and normal deoxynucleotide oligomers (21-base) annealed to M13mp18(+) DNA as the excision substrates, we demonstrated that DNA polymerase epsilon was unable to effectively remove F-ara-AMP from the 3'-end of the oligomer. However, 3'-terminal dAMP and subsequently other deoxynucleotides were readily excised from DNA in a distributive fashion. Kinetic evaluation demonstrated that although DNA polymerase epsilon has a higher affinity for F-ara-AMP-terminated DNA (Km = 7.1 pM) than for dAMP-terminated DNA of otherwise identical sequence (Km = 265 pM), excision of F-ara-AMP proceeded at a substantially slower rate (Vmax = 0.053 pmol/min/mg) than for 3'-terminal dAMP (Vmax = 1.96 pmol/min/mg). When the 3'-5' phosphodiester bond between F-ara-AMP at the 3'-terminus and the adjacent normal deoxynucleotide was cleaved by DNA polymerase epsilon, the reaction products appeared to remain associated with the enzyme but without the formation of a covalent bond. No further excision of the remaining oligomers was observed after the addition of fresh DNA polymerase epsilon to the reaction. Furthermore, the addition of DNA polymerase alpha and deoxynucleoside triphosphates to the excision reaction failed to extend the oligomers. After DNA polymerase epsilon had been incubated with 3'-F-ara-AMP-21-mer for 10 min, the enzyme was no longer able to excise 3'-terminal dAMP from a freshly added normal 21-mer annealed to M13mp18(+) template. We conclude that the 3' --> 5' exonuclease of human DNA polymerase epsilon can remove 3'-terminal F-ara-AMP from DNA with difficulty and that this excision results in a mechanism-mediated formation of "dead end complex."