Unrepaired DNA lesions block replication and threaten genomic stability. Several specialized translesion polymerases, including polymerase θ (Pol θ), contribute to replicative bypass of these lesions. The role of Pol θ in double-strand break repair is well-understood, but its contribution to translesion synthesis is much less so. We describe the action of Pol θ on templates containing thymidine glycol (Tg), a major cytotoxic, oxidative DNA lesion that blocks DNA replication. Unrepaired Tg lesions are bypassed in human cells by specialized translesion polymerases by one of two distinct pathways: high-fidelity bypass by the combined action of Pol κ and Pol ζ or weakly mutagenic bypass by Pol θ. Here we report that in vitro bypass of Tg by Pol θ results in frameshift mutations (deletions) in a sequence-dependent fashion. Steady-state kinetic analysis indicated that one- and two-nucleotide deletions are formed 9- and 6-fold more efficiently, respectively, than correct, full-length bypass products. Sequencing of in vitro bypass products revealed that bypass preference decreased in the following order on a template where all three outcomes were possible: two-nucleotide deletion > correct bypass > one-nucleotide deletion. These results suggest that bypass of Tg by Pol θ results in mutations opposite the lesion, as well as frameshift mutations.