DNA polymerase theta (Pol theta) is a multifunctional enzyme. It is nonessential in normal cells, but its upregulation in cancer cells correlates with cellular resistance to oxidative damage and poor prognosis. Pol theta possesses polymerase activity and poorly characterized lyase activity. We examined the Pol theta lyase activity on various abasic sites and determined that the enzyme is inactivated upon attempted removal of the oxidized abasic site commonly associated with C4'-oxidation (pC4-AP). Covalent modification of Pol theta by the DNA lesion enabled determination of the primary nucleophile (Lys(2383)) responsible for Schiff base formation in the lyase reaction. Unlike some other base excision repair polymerases, Pol theta uses a single active site for polymerase and lyase activity. Mutation of Lys(2383) significantly reduces both enzyme activities but not DNA binding. Demonstration that Lys(2383) is required for polymerase and lyase activities indicates that this residue is an Achilles heel for Pol theta and suggests a path forward for designing inhibitors of this attractive anticancer target.