The thymidine analog fialuridine deoxy-2-fluoro-beta-D-arabinofuranosyl)-5-iodouracil (FIAU) was toxic in trials for chronic hepatitis B infection. One mechanism postulated that defective mtDNA replication was mediated through inhibition of DNA polymerase-gamma (DNA pol-gamma), by FIAU triphosphate (FIALTP) or by triphosphates of FIAU metabolites. Inhibition kinetics and primer-extension analyses determined biochemical mechanisms of FIAU, 1-(2-deoxy-2-fluoro-beta-D-arabinofuranosyl) -5-methyluracil (FAU), 1-(2-deoxy-2-fluoro-beta-D-arabinofuranosyl)uracil triphosphate (TP) inhibition of DNA pol-gamma. dTMP incorporation by DNA pol-gamma was inhibited competitively by FIAUTP, FMAUTP, and FAUTP (K1=0.015, 0.03, and 1.0 microM, respectively). By using oliginucleotide template-primers. DNA pol-gamma incorporated each analog into DNA opposite a single adenosine efficiently without effects on DNA chain elongation. Incorporation of multiple adjacent analogs at positions of consecutive adenosines dramatically impaired chain elongation by DNA pol-gamma. Effects of FIAU, FMAU, and FAU on HepG2 cell mmtDNA abundance and ultrastructure were determined. After 14 days, mtDNA decreased by 30% with 20 microM FIAU or 20 microM FMAU and decreased less than 10% with 100 microM FAU. FIAU and FMAU disrupted mitochondria and caused accumulation of intracytoplasmic lipid droplets. Biochemical and cell biological findings suggest that FIAU and its metabolites inhibit mtDNA replication, most likely at positions of adenosine tracts, leading to decreased mtDNA and mitochondrial ultrastructural defects.