The DNA damage response (DDR) protein DNA Polymerase θ (Polθ) is synthetic lethal with homologous recombination (HR) factors and is therefore a promising drug target in BRCA1/2 mutant cancers. We discover an allosteric Polθ inhibitor (Polθi) class with 4-6 nM IC50 that selectively kills HR-deficient cells and acts synergistically with PARP inhibitors (PARPi) in multiple genetic backgrounds. X-ray crystallography and biochemistry reveal that Polθi selectively inhibits Polθ polymerase (Polθ-pol) in the closed conformation on B-form DNA/DNA via an induced fit mechanism. In contrast, Polθi fails to inhibit Polθ-pol catalytic activity on A-form DNA/RNA in which the enzyme binds in the open configuration. Remarkably, Polθi binding to the Polθ-pol:DNA/DNA closed complex traps the polymerase on DNA for more than forty minutes which elucidates the inhibitory mechanism of action. These data reveal a unique small-molecule DNA polymerase:DNA trapping mechanism that induces synthetic lethality in HR-deficient cells and potentiates the activity of PARPi