Cyclobutane pyrimidine dimers (CPDs) are responsible for a considerable fraction of sunlight-induced C to T and 5-methycytosine (mC) to T mutations in mammalian cells, though the precise mechanism is unknown. One possibility is that the C or mC of a CPD is not mutagenic and must first deaminate to U or T, respectively, for A to be inserted by a DNA polymerase. Alternatively, A might be directly inserted opposite the C or mC prior to deamination via an E-imino tautomer of the C or mC or by a nontemplated mechanism in which the photoproduct is sterically excluded from the active site. We have taken advantage of the retarding effect of C5 methylation on the deamination rate of cis-syn-cyclobutane dimers to prepare a template containing the cis-syn-cyclobutane dimer of mCT. Through the use of single-hit and multiple-hit competition assays, the catalytic core of pol eta was found to insert dGMP opposite the mC of the CPD with about a 120:1 selectivity relative to dAMP. No significant insertion of dTTP or dCMP was detected. The high fidelity of nonmutagenic insertion opposite the mC of the CPD provides strong support for the deamination-bypass mechanism for the origin of sunlight induced C --> T mutations.