Gemcitabine [2',2'-difluorodeoxycytidine (dFdCyd)], a potent antitumor agent, inhibits DNA synthesis and is incorporated internally into DNA. The effect of a template-incorporated dFdCyd molecule (dFdCyd-) on DNA polymerase function was examined. Two 25-base deoxyoligonucleotides were synthesized with either a single dFdCyd- or template-incorporated deoxycytidine molecule (dCyd-) at the same position. Each was annealed separately to an identical complementary 5'-32P-labeled primer and extended by the Klenow fragment (3'-->5' exo-) of DNA polymerase I. "Correct" insertion of dGMP was 80-fold less efficient opposite dFdCyd- than dCyd-. A comparison of misinsertion efficiencies opposite template dFdCyd gave values of 2.7 x 10(-2) for dAMP insertion, 1.1 x 10(-3) for dTMP insertion, and 5.9 x 10(-4) for dCMP insertion. A similar measurement opposite template dC gave values of 1.8 x 10(-4), 1.7 x 10(-4), and 2.9 x 10(-6) for dAMP, dTMP, and dCMP insertion, respectively. Thus, the presence of dFdCyd on the template strand inhibited "normal" DNA synthesis and increased deoxyribonucleotide misinsertion frequencies. Pausing during DNA synthesis occurred directly opposite template dFdCyd suggesting that dFdC.dG base pairs might be less stable than normal dC.dG pairs, resulting in a decreased rate of primer extension beyond this site. Consistent with kinetic data, thermal denaturation measurements using comparable surrounding sequences showed that dFdC.dG "correct" pairs were less stable than dC.dG base pairs. Measurements on base mispairs showed that dFdC.dC was more stable than dC.dC, while no measurable Tm differences were found between polymers containing dFdC.dA and dC.dA or dFdC.dT, and dC.dT.