A wide variety of endogenous and exogenous alkylating agents attack DNA to preferentially generate N7-alkylguanine (N7-alkylG) adducts. Studies on the effect of N7-alkylG lesions on biological processes have been difficult due in part to complications arising from the chemical lability of the positively charged N7-alkylG, which can readily produce secondary lesions. To assess the effect of bulky N7-alkylG on DNA replication, we prepared chemically stable N7-benzylguanine(N7bnG)-containing DNA and evaluated nucleotide incorporation opposite the lesion by human DNA polymerase β (polβ), a model enzyme for high-fidelity DNA polymerases. Kinetic studies showed that the N7-benzyl-G lesion greatly inhibited dCTP incorporation by polβ. The crystal structure of polβ incorporating dCTP opposite N7bnG showed a Watson-Crick N7bnG:dCTP. The polβ-N7bnG:dCTP structure showed an open protein conformation, a relatively disordered dCTP, and lack of catalytic metal, which explained the inefficient nucleotide incorporation opposite N7bnG. This indicates that polβ is sensitive to major groove adducts in the templating-base side and deters nucleotide incorporation opposite bulky N7-alkylG adducts by adopting a catalytically incompetent conformation. Substituting Mg2+ for Mn2+ induced an open-to-closed conformational change due to the presence of catalytic metal and stably bound dCTP and increased the catalytic efficiency by ~10-fold, highlighting the effect of binding of incoming nucleotide and catalytic metal on protein conformation and nucleotidyl transfer reaction. Overall, these results suggest that, although bulky alkyl groups at guanine-N7 may not alter base-pairing properties of guanine, the major-groove-positioned lesions in the template could impede nucleotidyl transfer by some DNA polymerases.