Repair of DNA double strand breaks by nonhomologous end joining (NHEJ) requires enzymatic processing beyond simple ligation when the terminal bases are damaged or not fully compatible. We transformed yeast with a series of linearized plasmids to examine the role of Pol4 (Pol IV, DNA polymerase beta) in repair at a variety of end configurations. Mutation of POL4 did not impair DNA polymerase-independent religation of fully compatible ends and led to at most a 2-fold reduction in the frequency of joins that require only DNA polymerization. In contrast, the frequency of joins that also required removal of a 5'- or 3'-terminal mismatch was markedly reduced in pol4 (but not rev3, exo1, apn1, or rad1) yeast. In a chromosomal double strand break assay, pol4 mutation conferred a marked increase in sensitivity to HO endonuclease in a rad52 background, due primarily to loss of an NHEJ event that anneals with a 3'-terminal mismatch. The NHEJ activity of Pol4 was dependent on its nucleotidyl transferase function, as well as its unique amino terminus. Paradoxically, in vitro analyses with oligonucleotide substrates demonstrated that although Pol4 fills gaps with displacement of mismatched but not matched 5' termini, it lacks both 5'- and 3'-terminal nuclease activities. Pol4 is thus specifically recruited to perform gap-filling in an NHEJ pathway that must also involve as yet unidentified nucleases.