Proper S phase progression during cell cycle requires a balanced and abundant nucleotide pool. Impairment in the nucleotide biosynthesis may lead to DNA replication errors and DNA damage checkpoint activation and also can violate genome integrity. dUTPase has the role to maintain uracil-free genome by eliminating dUTP from the nucleotide pool. However, physiological fate of the unusual uracil-substituted DNA is not described in details. Depletion of dUTPase in some organisms (E. coli, S. cerevisiae, A. thaliana, C. elegans) revealed its conservative role to preserve genome integrity and avoid DNA repair responses. Among uracil-DNA glycosylases, UNG is the most important DNA repair enzyme that is responsible for the majority of uracil-DNA processing, and whose depletion can complement dUTPase deficiency at least partially. Since Drosophila lacks the UNG enzyme, it provides a hopeful model to study the fate of uracil-substituted DNA. We showed that dUTPase expression is restricted mainly to undifferentiated proliferating tissues. Furthermore, genomic uracil substitution depends on the dUTPase expression pattern in Drosophila larval tissues, since absence of UNG allows the persistence of uracil-DNA in differentiated tissues. Perturbing this pattern by dUTPase silencing increased the rate of genomic uracil substitution in undifferentiated tissues as well. However, lack of UNG does not guarantee complete tolerance to uracil-DNA. We detected an increased rate of DNA strand breaks in imaginal wing precursor tissue and developmental defects in pupal stage. Our suggested candidate for uracil-DNA processing is the mismatch-specific TDG homologue uracil-DNA glycosylase, Thd1, whose silencing complemented pupal lethality of dUTPase silenced animals.