The fidelity of genetic information is essential for cellular function and viability. DNA double-strand breaks (DSBs) pose a significant threat to genome integrity, necessitating efficient repair mechanisms. While the predominant repair strategies are usually accurate, paradoxically, error-prone pathways also exist. This review explores recent advances and our understanding of microhomology-mediated end joining (MMEJ), an intrinsically mutagenic DSB repair pathway conserved across organisms. Central to MMEJ is the activity of DNA polymerase theta (Polθ), a specialized polymerase that fuels MMEJ mutagenicity. We examine the molecular intricacies underlying MMEJ activity and discuss its function during mitosis, where the activity of Polθ emerges as a last-ditch effort to resolve persistent DSBs, especially when homologous recombination is compromised. We explore the promising therapeutic applications of targeting Polθ in cancer treatment and genome editing. Lastly, we discuss the evolutionary consequences of MMEJ, highlighting its delicate balance between protecting genome integrity and driving genomic diversity.