Oxidative DNA damage, particularly 8-oxoguanine (8OG), is a significant contributor to transcriptional errors that can alter the cellular phenotype and cell fate. While previous studies proposed that 8OG can use its anti-conformation or syn-conformation to form distinct base pairs with different substrates, it is not clear what conformation 8OG adopts during the template loading step and how different substrates induce transcription-coupled conformational changes of the 8OG template within the active site. Through a combined approach of time-resolved X-ray crystallography and molecular dynamics (MD) simulations, our study provides a comprehensive insight into these important questions. We found that the 8OG template behaves very differently for error-free and error-prone transcription. For error-free CTP incorporation, 8OG remains in anti-conformation during template loading, nucleotide binding, and incorporation steps. As for error-prone ATP incorporation, using time-resolved crystallography, we observed that the 8OG template initially adopts anti-conformation during template loading and the initial nucleotide binding step. However, it transitions to the syn-conformation to form a base pair with incoming ATP over the course of the reaction. Eventually, we observed a post-chemistry state where 8OG adopts the syn-conformation, base-paired with newly incorporated AMP. MD simulations further revealed that the 8OG template switches from an anti- to a syn-conformation by partially backtracking and subsequently reloading into the +1 site. These findings significantly contribute to our understanding of how RNA polymerase II navigates 8OG lesions during transcription, shedding light on transcription fidelity control and the lesion bypass of oxidative DNA damage.