Human DNA polymerases (pols) beta and lambda could promote template slippage and generate -1 frameshifts on defined heteropolymeric DNA substrates containing a single abasic site. Kinetic data demonstrated that pol lambda was more efficient than pol beta in catalyzing translesion DNA synthesis past an abasic site, particularly in the presence of low nucleotide concentrations. Moreover, pol lambda was found to generate frameshifts in two ways: first, by using a nucleotide-stabilized primer misalignment mechanism, or second, by promoting primer reannealing using microhomology regions between the terminal primer sequence and the template strand. Our results suggest a molecular mechanism for the observed high in vivo rate of frameshifts generation by pol lambda and highlight the remarkable ability of pol lambda to promote microhomology pairing between two DNA strands, further supporting its proposed role in the nonhomologous end joining process.