Phage XP-12, which has complete substitution of the cytosine residues in its DNA with 5-methylcytosine residues, was shown to inhibit incorporation of uracil into host DNA and RNA during the latent period. This apparent inhibition of host macromolecular synthesis was not accompanied by extensive degradation of the host chromosome. Phage DNA synthesis in infected cells occurred at a faster rate than host DNA synthesis in analogous uninfected cells. However, phage DNA synthesis could not be accurately monitored by incorporation of [methyl-3H]thymidine into DNA because, soon after infection, there was a marked inhibition of utilization of exogenous thymidine for DNA synthesis. Phage infection conferred upon a thymine auxotrophic host the ability to synthesize thymine nucleotides for phage DNA synthesis. It is suggested that a phage-induced thymidylate synthetase activity is partially responsible for the inhibition of thymidine incorporation.