DNA polymerase η (Polη) is unique among eukaryotic polymerases in its proficient ability for error-free replication through UV induced cyclobutane pyrimidine dimers, and inactivation of Polη in humans causes the variant form of xeroderma pigmentosum (XPV). We present the crystal structures of yeast Polη in ternary complex with a cis-syn thymine-thymine (T-T) dimer and with undamaged DNA. The structures reveal that the ability of Polη to efficiently replicate through the UV-induced lesion derives from a simple and yet elegant mechanism, wherein the two Ts of the T-T dimer are accommodated in an active site cleft that is much more open than in other polymerases. We also show by structural, biochemical and genetic analysis that the two Ts are maintained in a stable configuration in the active site via interactions with Gln55, Arg73, and Met74. Together, these features define the basis for Polη's action on UV damaged DNA that is crucial in suppressing the mutagenic and carcinogenic consequences of sun exposure, reducing thereby the incidence of skin cancers in humans.