DNA replication polymerases have the inherent ability to faithfully and rapidly copy a DNA template according to precise Watson-Crick base pairing. The primary B-family DNA replication polymerase (Dpo1) in the hyperthermophilic archaeon, Sulfolobus solfataricus, is shown here to possess a remarkable DNA stabilizing ability for maintaining weak base pairing interactions to facilitate primer extension. This thermal stabilization by Dpo1 allowed for template-directed synthesis at temperatures more than 30 °C above the melting temperature of naked DNA. Surprisingly, Dpo1 also displays a competing terminal deoxynucleotide transferase (TdT) activity unlike any other B-family DNA polymerase. Dpo1 is shown to elongate single-stranded DNA in template-dependent and template-independent manners. Experiments with different homopolymeric templates indicate that initial deoxyribonucleotide incorporation is complementary to the template. Rate-limiting steps that include looping back and annealing to the template allow for a unique template-dependent terminal transferase activity. The multiple activities of this unique B-family DNA polymerase make this enzyme an essential component for DNA replication and DNA repair for the maintenance of the archaeal genome at high temperatures.