Mutations in human mitochondrial DNA influence aging, induce severe neuromuscular pathologies, cause maternally inherited metabolic diseases, and suppress apoptosis. Since the genetic stability of mitochondrial DNA depends on the accuracy of DNA polymerase gamma (pol gamma), we investigated the fidelity of DNA synthesis by human pol gamma. Comparison of the wild-type 140-kDa catalytic subunit to its exonuclease-deficient derivative indicates pol gamma has high base substitution fidelity that results from high nucleotide selectivity and exonucleolytic proofreading. pol gamma is also relatively accurate for single-base additions and deletions in non-iterated and short repetitive sequences. However, when copying homopolymeric sequences longer than four nucleotides, pol gamma has low frameshift fidelity and also generates base substitutions inferred to result from a primer dislocation mechanism. The ability of pol gamma both to make and to proofread dislocation intermediates is the first such evidence for a family A polymerase. Including the p55 accessory subunit, which confers processivity to the pol gamma catalytic subunit, decreases frameshift and base substitution fidelity. Kinetic analyses indicate that p55 promotes extension of mismatched termini to lower the fidelity. These data suggest that homopolymeric runs in mitochondrial DNA may be particularly prone to frameshift mutation in vivo due to replication errors by pol gamma.