Oxidative damage to DNA, implicated in mutagenesis, aging, and cancer, follows electron loss that generates a radical cation that migrates to a guanine, where it may react with water to form 8-oxo-7,8-dihydroguanine (8-OxoG). Molecular dynamics and ab initio quantum simulations on a B-DNA tetradecamer reveal activated reaction pathways that depend on the local counterion arrangement. The lowest activation barrier, 0.73 eV, is found for a reaction that starts from a configuration where a Na+ resides in the major groove near the N7 atoms of adjacent guanines, and evolves through a transition state where a bond between a water oxygen atom and a carbon atom forms concurrently with displacement of a proton toward a neighboring water molecule. Subsequently, a bonded complex of a hydronium ion and the nearest backbone phosphate group forms. This counterion-assisted proton shuttle mechanism is supported by experiments exploiting selective substitution of backbone phosphates by methylphosphonates.