We have investigated the mechanism of bromouracil-induced transition mutations in vitro using synthetic DNA templates and purified T4 DNA polymerase. Evidence is presented for the occurrence of bromouracil-guanine base pairs in product DNA in the G x C----A x T pathway where guanine is present in the DNA template and bromouracil is present as the deoxynucleoside triphosphate substrate 5-bromodeoxyuridine triphosphate. This finding supports a widely known but as yet untested model proposed by Freese (Freese, E. (1959) J. Mol. Biol. 1, 87-105) in which bromouracil-guanine base pairs are intermediates in 5-bromodeoxyuridine-induced transition mutation pathways. We find that the newly formed B x G base pairs are proofread with an efficiency of 75-85% by the 3' -exonuclease of T4 polymerase. The insertion of bromouracil occurring in direct competition with cytosine deoxyribonucleotides opposite template guanine sites is 1.1 +/- 0.14% (mean +/- S.E.), and the misincorporation ratio, inc(B)/inc(C), is reduced 6-fold by the action of the proofreading exonuclease to 0.16 +/- 0.02% (mean +/- S.E.). A previous study by Trautner et al. (Trautner, T. A., Swartz, M. N., and Kornberg, A. (1962) Proc. Natl. Acad. Sci. U. S. A. 48, 449-455) suggested that, while template bromouracil stimulates incorporation of dGMP in the A x T----G x C transition mutation pathway, it may not be occurring exclusively by the pathway proposed by Freese. We concur with these earlier results, and, in addition, we find the surprising result that the 3'-exonuclease activity of wild-type T4 polymerase removes little or no incorporated dGMP on bromouracil-containing templates.