We developed an in vivo selection to identify 3'-azido-3'-deoxythymidine (AZT)-resistant mutants of rat DNA polymerase beta (pol beta). The selection utilizes pol beta's ability to substitute for Escherichia coli DNA polymerase I (pol I) in the SC18-12 strain, which lacks active pol I. pol beta allows SC18-12 cells to grow, but they depend on pol beta activity, so inhibition of pol beta by AZT kills them. We screened a library of randomly mutated pol beta cDNA for complementation of the pol I defect in the presence of AZT, and identified AZT-resistant mutants. We purified two enzymes with nonconservative mutations in the palm domain of the polymerase. The substitutions D246V and R253M result in reductions in the steady-state catalytic efficiency (Kcat/Km) of AZT-TP incorporation. The efficiency of dTTP incorporation was unchanged for the D246V enzyme, indicating that the substantial decrease in AZT-TP incorporation is responsible for its drug resistance. The R253M enzyme exhibits significantly higher Km(dTTP) and Kcat(dTTP) values, implying that the incorporation reaction is altered. These are the first pol beta mutants demonstrated to exhibit AZT resistance in vitro. The locations of the Asp-246 and Arg-253 side chains indicate that substrate specificity is influenced by residues distant from the nucleotide-binding pocket.