Trinucleotide repeat (TNR) expansions and deletions are associated with human neurodegenerative diseases and prostate cancer. Recent studies have pointed to a linkage between oxidative DNA damage, base excision repair (BER) and TNR expansion, which is demonstrated by the observation that DNA polymerase β (pol β) gap-filling synthesis acts in concert with alternate flap cleavage by flap endonuclease 1 (FEN1) to mediate CAG repeat expansions. In this study, we provide the first evidence that the repair of a DNA base lesion can also contribute to CAG repeat deletions that were initiated by the formation of hairpins on both the template and the damaged strand of a continuous run of (CAG)(20) or (CAG)(25) repeats. Most important, we found that pol β not only bypassed one part of the large template hairpin but also managed to pass through almost the entire length of small hairpin. The unique hairpin bypass of pol β resulted in large and small deletions in coordination with FEN1 alternate flap cleavage. Our results provide new insight into the role of BER in modulating genome stability that is associated with human diseases.