Theta-mediated end-joining (TMEJ) is critical for survival of cancer cells when other DNA double-stranded break repair pathways are impaired. Human DNA polymerase theta (Pol θ) can extend single-stranded DNA oligonucleotides, but little is known about preferred substrates and mechanism. We show that Pol θ can extend both single-stranded DNA and RNA substrates by unimolecular stem loop synthesis initiated by only two 3ʹ terminal base-pairs. Given sufficient time, Pol θ uses alternative pairing configurations that greatly expand the repertoire of sequence outcomes. Further primer-template adjustments yield low-fidelity outcomes when the nucleotide pool is imbalanced. Unimolecular stem loop synthesis competes with bimolecular end-joining, even when a longer terminal microhomology for end-joining is available. Both reactions are partially suppressed by the ssDNA binding protein RPA. Protein-primer grasp residues that are specific to Pol θ are needed for rapid stem-loop synthesis. The ability to perform stem-loop synthesis from a minimally paired primer is rare amongst human DNA polymerases but we show that human DNA polymerases Pol η and Pol λ can catalyze related reactions. Using purified human Pol θ, we reconstituted in vitro TMEJ incorporating an insertion arising from a stem loop extension. These activities may help explain TMEJ repair events that include inverted repeat sequences.
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