The present study was undertaken to examine the possible genotoxicity of ambient particulate matter (PM10 and PM2.5) in Pune city. In both size fractions of PM, Fe was found to be the dominant metal by concentration, contributing 22% and 30% to the total mass of metals in PM10 and PM2.5, respectively. The speciation of soluble Fe in PM10 and PM2.5 was investigated. The average fraction of Fe3+ and Fe2+ concentrations in PM2.5 was 80.6% and 19.3%, respectively, while in PM2.5 this fraction was 71.1% and 29.9%, respectively. The dominance of Fe(III) state in both PM fractions facilitates the generation of hydroxyl radicals (·OH), which can damage deoxyribose nucleic acid (DNA), as was evident from the gel electrophoresis study. The DNA damage by ·OH was supported through the in silico density functional theory (DFT) method. DFT results showed that C8 site of guanine (G)/adenine (A) and C6 site of thymine (T)/cytosine (C) would be energetically more favorable for the attack of hydroxyl radicals, when compared with the C4 and C5 sites. The non-standard Watson–Crick base pairing models of oxidative products of G, A, T and C yield lower-energy conformations than canonical dA:dT and dG:dC base pairing. This study may pave the way to understand the structural consequences of base-mediated oxidative lesions in DNA and its role in human diseases.