Eukaryotic telomeres have a 12-1 6 nucleotide long deoxyguanosine (dG) rich single-stranded overhang at their molecular termini. Some of the unique features of telomeres are probably attributable to a specialized structure formed by this overhang. In the ciliated protozoan Tetrahymena thermophila, the dG-rich overhang is comprised of approximately two repeats of the sequence d(TTGGGG). Previous work has shown that the synthetic oligonucleotide d(TTGGGG),, can form an unusual non-Watson-Crick base-paired structure (the "G-strand structure") containing G-G base pairs and syn-guanines. We have tested the susceptibility of various dGs in this structure to methylation by DMS. At 0-10 "C one dG residue is hypersensitive to methylation while others are particularly resistant. By systematically substituting deoxyinosine (dI) for dG in d(TTGGGG)4 we identify N2 groups of guanine essential for formation of the G-strand structure. We show that dI-substituted molecules that cannot form the G-strand structure nonetheless function as substrates for telomere repeat addition in vitro by the telomere lengthening enzyme, telomerase. The implications of these data are discussed.