Protein p56 encoded by the Bacillus subtilis phage phi29 inhibits host uracil-DNA glycosylase (UDG) activity. In previous studies, we suggested that this inhibition is likely a defense mechanism developed by phage phi29 to prevent the action of UDG if uracilation occurs in DNA either from deamination of cytosine or the incorporation of dUMP during viral DNA replication. In this work, we analyzed the ability of phi29 DNA polymerase to insert dUMP into DNA. Primer extension analysis showed that viral DNA polymerase incorporates dU opposite dA with a catalytic efficiency only 2-fold lower than that for dT. Using the phi29 DNA amplification system, we found that phi29 DNA polymerase is also able to carry out the extension of the dA:dUMP pair and replicate past uracil. Additionally, UDG and apurinic-apyrimidinic endonuclease treatment of viral DNA isolated from phi29-infected cells revealed that uracil residues arise in phi29 DNA during replication, probably as a result of misincorporation of dUMP by the phi29 DNA polymerase. On the other hand, the action of UDG on uracil-containing phi29 DNA impaired in vitro viral DNA replication, which was prevented by the presence of protein p56. Furthermore, transfection activity of uracil-containing phi29 DNA was significantly higher in cells that constitutively synthesized p56 than in cells lacking this protein. Thus, our data support a model in which protein p56 ensures an efficient viral DNA replication, preventing the deleterious effect caused by UDG when it eliminates uracil residues present in the phi29 genome.