Poly(A), poly(C), and poly(U) containing about 10% modified nucleoside were used as templates in transcription experiments using DNA-dependent RNA polymerase in the presence of Mn2+. The presence of 3-methylcytidine, 3-methyluridine, 1-methyladenosine, and N6-methyladenosine did not prevent transcription but decreased the rate. Polymers containing xanthosine were transcribed with the same rate as homopolymers, but those with 11% 1-methylguanosine were virtually inactive as templates. Nearest-neighbor analysis of products of transcription of various copolymers showed that, in the presence of all four nucleoside triphosphates, 3-methylcytidine was able to direct AMP, CMP, and UMP equally well into the complementary strand. 1-Methyl-adenosine also directed incorporation of AMP, GMP, CMP, and UMP but with a preference for AMP and UMP. 3-Methyluridine directed AMP and UMP incorporation. 3-Methyluridine-directed CMP incorporation was low but could be verified when ATP and UTP were absent. Polymers containing N6-methyladenosine, xanthosine, or 5-fluorouridine directed incorporation of the expected complementary nucleotide only. The data presented indicate that, under competitive conditions (all four NTPs present), nucleosides modified on the N-3 of Urd or Cyd and the N-l of Ado have little or no specificity in transcription, thus behaving ambiguously. Although incorporation of GMP could only be found for 1-methyladenosine due to technical problems, it is likely that the N-3 methylated pyrimidines also direct GMP. It is postulated that no specific hydrogen bonds are formed between the modified bases in the template and the nucleoside triphosphate, but instead other factors such as stacking forces and the RNA polymerase itself direct incorporation of two, three, or four nucleotides. In templates, 3-methylcytidine, 3-methyluridine, and 1-methyladenosine are by this criterion mutagenic. © 1979, American Chemical Society. All rights reserved.