Accurate DNA synthesis in vivo depends on the ability of DNA polymerases to select deoxyribonucleotides (dNTPs) from a nucleotide pool dominated by ribonucleotides (NTPs). High-fidelity replicative polymerases have evolved to efficiently exclude NTPs while copying long stretches of undamaged DNA. However, to bypass DNA damage, cells utilize specialized low-fidelity polymerases to perform translesion DNA synthesis (TLS). Of interest is human DNA polymerase iota (pol iota), which has been implicated in TLS of oxidative and UV-induced lesions. Here, we evaluate the ability of pol iota to incorporate NTPs during DNA synthesis. Pol iota incorporates and extends NTPs opposite damaged and undamaged template bases in a template-specific manner. The Y39A steric gate pol iota is considerably more active in the presence of Mn2+ compared with Mg2+ and exhibits a marked increase in NTP incorporation and extension and surprisingly, it also exhibits increased dNTP base selectivity. Our results indicate that a single residue in pol iota is able to discriminate between NTPs and dNTPs during DNA synthesis. Since wild-type pol iota incorporates NTPs in a template-specific manner, certain DNA sequences may be at-risk for elevated mutagenesis during pol iota-dependent TLS. Molecular modeling indicates that the constricted active site of wild-type pol iota becomes more spacious in the Y39A variant. Therefore, the Y39A substitution not only permits incorporation of ribonucleotides, but also causes the enzyme to favor faithful Watson-Crick base pairing over mutagenic configurations.