The mechanism by which DNA polymerase discriminates between complementary and noncomplementary nucleotides for insertion into a primer terminus has been investigated. Apparent kinetic constants for the insertion of dGTP and dATP into the hook polymer d(C)194-d(G)12 with Escherichia coli DNA polymerase I (large fragment) were determined. The results suggest that the high specificity of base selection by DNA polymerase I is achieved by utilization of both Km and Vmax differences between complementary and noncomplementary nucleotides. The molecular basis for the increased error frequency observed with DNA polymerase I in the presence of Mn2+ has also been investigated. Our studies demonstrate that when Mn2+ is substituted for Mg2+, there is a higher ratio of insertion of incorrect to correct dNTP by the polymerase activity, accompanied by a decreased hydrolysis of a mismatched dNMP relative to a matched dNMP at the primer terminus by the 3',5' exonuclease activity. Kinetic analysis revealed that in the presence of Mn2+, the kcat for insertion of a complementary dNTP is reduced, whereas the catalytic rate for the insertion of a mismatched nucleotide is increased. The apparent Km values for either complementary or noncomplementary nucleotide substrates are not significantly altered when Mg2+ is replaced by Mn2+. The rate of hydrolysis of a mismatched dNMP at the primer terminus is greater in the presence of Mg2+ vs. Mn2+, whereas the rate of hydrolysis of a properly base-paired terminal nucleotide is greater in Mn2+ vs. Mg2+. These studies demonstrate that both the accuracy of base selection by the polymerase activity and the specificity of hydrolysis by the 3',5' exonuclease activity are altered by the substitution of Mn2+ for Mg2+.