Understanding polymerase fidelity is an important objective towards ascertaining the overall stability of an organism's genome. Saccharomyces cerevisiae DNA polymerase eta (yPoleta), a Y-family DNA polymerase, is known to efficiently bypass DNA lesions (e.g., pyrimidine dimers) in vivo. Using pre-steady-state kinetic methods, we examined both full-length and a truncated version of yPoleta which contains only the polymerase domain. In the absence of yPoleta's C-terminal residues 514-632, the DNA binding affinity was weakened by 2-fold and the base substitution fidelity dropped by 3-fold. Thus, the C-terminus of yPoleta may interact with DNA and slightly alter the conformation of the polymerase domain during catalysis. In general, yPoleta discriminated between a correct and incorrect nucleotide more during the incorporation step (50-fold on average) than the ground-state binding step (18-fold on average). Blunt-end additions of dATP or pyrene nucleotide 5'-triphosphate revealed the importance of base stacking during the binding of incorrect incoming nucleotides.