1-beta-D-Arabinofuranosylcytosine (ara-C) is an effective antileukemic agent which acts as an inhibitor of DNA synthesis. The precise mechanism responsible for this inhibitory effect, however, remains unclear. The present work has examined the effects of the triphosphate derivative, ara-CTP, on purified DNA polymerase beta. These studies were performed on M13 phage DNA templates of defined sequence. The results demonstrate that ara-C is incorporated into DNA by DNA polymerase beta. The results also demonstrate that the incorporated ara-C residue acts as a relative chain terminator. Moreover, the relative chain terminating effects of ara-C are sequence specific. In this regard, DNA strand elongation was progressively slowed at sequences of two, three, and four contiguous sites for cytosine incorporation. We also demonstrate that the inhibitory effects of ara-C are reversed by competition with deoxycytidine-triphosphate for incorporation into the DNA strand. Taken together, these findings are consistent with structural differences of the incorporated arabinosyl moiety which alter reactivity of the 3'-terminus and thereby inhibit chain elongation. These findings also provide new insights regarding the inhibitory effects of ara-C on elongation of specific DNA sequences.