Most mammalian cells in nature are quiescent but actively transcribing mRNA for normal physiological processes; thus, it is important to investigate how endogenous and exogenous DNA damage compromises transcription in cells. Here we describe a new competitive transcription and adduct bypass (CTAB) assay to determine the effects of DNA lesions on the fidelity and efficiency of transcription. Using this strategy, we demonstrate that the oxidatively induced lesions 8,5′-cyclo-2′-deoxyadenosine (cdA) and 8,5′-cyclo- 2′-deoxyguanosine (cdG) and the methylglyoxal-induced lesion N 2 -(1-carboxyethyl)-2′-deoxyguanosine (N 2 -CEdG) strongly inhibited transcription in vitro and in mammalian cells. In addition, cdA and cdG, but not N 2 -CEdG, induced transcriptional mutagenesis in vitro and in vivo. Furthermore, when located on the template DNA strand, all examined lesions were primarily repaired by transcription-coupled nucleotide excision repair in mammalian cells. This newly developed CTAB assay should be generally applicable for quantitatively assessing how other DNA lesions affect DNA transcription in vitro and in cells.