Ionizing radiation induces various clustered DNA lesions, including double-strand breaks (DSBs) accompanied by nearby oxidative base damage. Previous work showed that, in HeLa nuclear extracts, DSBs with partially complementary 3' overhangs and a one-base gap in each strand are accurately rejoined, with the gaps being filled by DNA polymerase lambda. To determine the possible effect of oxidative base damage on this process, plasmid substrates were constructed containing overhangs with 8-oxoguanine or thymine glycol in base-pairing positions of 3-base (-ACG or -GTA) 3' overhangs. In this context, 8-oxoguanine was well tolerated by the end-joining machinery when present at one end of the break, but not when present at both ends. Thymine glycol was less well tolerated than 8-oxoguanine, reducing gap filling and accurate rejoining by at least 10-fold. The results suggest that complex DSBs can be accurately rejoined despite the presence of accompanying base damage, but that nonplanar bases constitute a major barrier to this process and promote error-prone joining. A chimeric DNA polymerase, in which the catalytic domain of polymerase lambda was replaced with that of polymerase beta, could not substitute for polymerase lambda in these assays, suggesting that this domain is specifically adapted for gap filling on aligned DSB ends.