The human endonuclease III homologue (hNTH1) removes premutagenic cytosine damage from DNA. This includes 5-hydroxycytosine, which has increased potential for pairing with adenine, resulting in C --> T transition mutations. Here we report that hNTH1 acts on both 5-hydroxycytosine and abasic sites preferentially when these are situated opposite guanines in DNA. Discrimination against other opposite bases is strongly dependent on the presence of magnesium. To further elucidate this effect, we have introduced mutations in the helix-hairpin-helix domain of hNTH1 (K212S, P211R, +G212, and DeltaP211), and measured the kinetics of 5-hydroxycytosine removal of the mutants relative to wild type. The K212S and DeltaP211 (truncated hairpin) mutant proteins were both inactive, whereas the extended hairpin in the +G212 mutant diminished recognition and binding to 5-hydroxycytosine-containing DNA. The P211R mutant resembled native hNTH1, except for decreased specificity of binding. Despite the altered kinetic parameters, the active mutants retained the ability to discriminate against the pairing base, indicating that enzyme interactions with the opposite strand relies on other domains than the active site helix-hairpin-helix motif.