Mercaptopurine and thioguanine are anticancer and immunosuppressive agents that exert their primary cytotoxic effects via incorporation of deoxythioguanosine (dG(s)) into DNA, but the precise mechanism(s) by which this causes cytotoxicity remains unknown. We initially determined that the level of dG(s) incorporation into DNA of human T- and B-lineage leukemia cell lines did not correlate significantly with the extent of cytotoxicity (IC(50)), except that there was no cytotoxicity in the absence of dG(s) incorporation. To elucidate biological processes perturbed by dG(s) incorporation into DNA, we chemically synthesized oligodeoxyribonucleotides containing a single dG(s) (11 mer and 19 mer), which decreased the melting temperature (T(m)) of DNA-DNA duplexes without major structural changes, as evidenced by circular dichroism spectra. Using nuclear extracts from human lymphoblastic leukemia cells (CCRF-CEM, NALM6, and Molt4), we documented that dG(s) incorporation into the DNA strand of DNA-RNA heteroduplexes significantly inhibited human RNase H-catalyzed RNA cleavage (80-90% inhibition) and that a similar inhibition was evident with bacterial RNase H. These data provide the first evidence that thiopurines inhibit the function of RNase H, indicating that their mechanism of cytotoxicity may involve interference with this component of the replication machinery.