2'-C-cyano-2'-deoxy-1-beta-D-arabino-pentofuranosylcytosine (CNDAC) is a nucleoside analogue with a novel mechanism of action that is currently being evaluated in clinical trials. Incorporation of CNDAC triphosphate into DNA and extension during replication leads to single-strand breaks directly caused by beta-elimination. These breaks, or the lesions that arise from further processing, cause cells to arrest in G2. The purpose of this investigation was to define the molecular basis for G2 checkpoint activation and to delineate the sequelae of its abrogation. Cell lines derived from diverse human tissues underwent G2 arrest after CNDAC treatment, suggesting a common mechanism of response to the damage created. CNDAC-induced G2 arrest was instituted by activation of the Chk1-Cdc25C-Cdk1/cyclin B checkpoint pathway. Neither Chk2, p38, nor p53 was required for checkpoint activation. Inhibition of Chk1 kinase with 7-hydroxystaurosporine (UCN-01) abrogated the checkpoint pathway as indicated by dephosphorylation of checkpoint proteins and progression of cells through mitosis and into G1. Cell death was first evident in hematologic cell lines after G1 entry. As indicated by histone H2AX phosphorylation, DNA damage initiated by CNDAC incorporation was transformed into double-strand breaks when ML-1 cells arrested in G2. Some breaks were manifested as chromosomal aberrations when the G2 checkpoint of CNDAC-arrested cells was abrogated by UCN-01 but also in a minor population of cells that escaped to mitosis during treatment with CNDAC alone. These findings provide a mechanistic rationale for the design of new strategies, combining CNDAC with inhibitors of cell cycle checkpoint regulation in the therapy of hematologic malignancies.