A growing body of evidence indicates that RNA plays a critical role in orchestrating DNA double-strand break repair (DSBR). Recently, we showed that homologous nascent RNA can be used as a template for error-free repair of double-strand breaks (DSBs) in the transcribed genome and to restore the missing sequence at the break site via the transcriptioncoupled classical nonhomologous end-joining (TC-NHEJ) pathway. TC-NHEJ is a complex multistep process in which a reverse transcriptase (RT) is essential for synthesizing the DNA strand from template RNA. However, the identity of the RT involved in the TC-NHEJ pathway remained unknown. Here, we report that DNA polymerase eta (Pol η), known to possess RT activity, plays a critical role in TC-NHEJ. We found that Pol η forms a multiprotein complex with RNAP II and other TCNHEJ factors, while also associating with nascent RNA. Moreover, purified Pol η, along with DSBR proteins PNKP, XRCC4, and Ligase IV can fully repair RNA templated 30-phosphate-containing gapped DNA substrate. In addition, we demonstrate here that Pol η deficiency leads to accumulation of R-loops and persistent strand breaks in the transcribed genes. Finally, we determined that, in Pol η depleted but not in control cells, TC-NHEJ-mediated repair was severely abrogated when a reporter plasmid containing a DSB with several nucleotide deletion within the E. coli lacZ gene was introduced for repair in lacZ-expressing mammalian cells. Thus, our data strongly suggest that RT activity of Pol η is required in errorfree DSBR. [ABSTRACT FROM AUTHOR]