beta-D-Glucosyl-hydroxymethyluracil, also called J, is a modified DNA base conserved among kinetoplastid flagellates. In Trypanosoma brucei, the majority of J is present in repetitive DNA but the partial replacement of thymine by J also correlates with transcriptional repression of the variant surface glycoprotein (VSG) genes in the telomeric VSG gene expression sites. To gain a better understanding of the function of J, we studied its biosynthesis in T. brucei and found that it is made in two steps. In the first step, thymine in DNA is converted into hydroxymethyluracil by an enzyme that recognizes specific DNA sequences and/or structures. In the second step, hydroxymethyluracil is glucosylated by an enzyme that shows no obvious sequence specificity. We identified analogs of thymidine that affect the J content of the T. brucei genome upon incorporation into DNA. These analogs were used to study the function of J in the control of VSG gene expression sites. We found that incorporation of bromodeoxyuridine resulted in a 12-fold decrease in J content and caused a partial derepression of silent VSG gene expression site promoters, suggesting that J might strengthen transcriptional repression. Incorporation of hydroxymethyldeoxyuridine, resulting in a 15-fold increase in the J content, caused a reduction in the occurrence of chromosome breakage events sometimes associated with transcriptional switching between VSG gene expression sites in vitro. We speculate that these effects are mediated by the packaging of J-containing DNA into a condensed chromatin structure.