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Mutants with enhanced spontaneous mutability (hsm) to canavanine resistance were induced by N-methyl-N-nitrosourea in Saccharomyces cerevisiae. One bearing the hsm3-1 mutation was used for this study. This mutation does not increase sensitivity to the lethal action of different mutagens. The hsm3-1 mutation produces a mutator phenotype, enhancing the rates of spontaneous mutation to canavanine resistance and reversions of lys1-1 and his1-7. This mutation increases the rate of intragenic mitotic recombination at the ADE2 gene. The ability of the hsm3 mutant to correct DNA heteroduplex is reduced in comparison with the wild-type strain. All these phenotypes are similar to ones caused by pms1, mlhl, and msh2 mutations. In contrast to these mutations, hsm3-1 increases the frequency of ade mutations induced by 6-HAP and UV light. Epistasis analysis of double mutants shows that the PMS1 and HSM3 genes control different mismatch repair systems. The HSM3 gene maps to the right arm of chromosome II, 25 cM distal to the HIS7 gene. Strains that bear a deleted open reading frame YBR272c have the genetic properties of the hsm3 mutant. The HSM3 product shows weak similarity to predicted products of the yeast MSH genes (homologs of the Escherichia coli mutS gene). The HSM3 gene may be a member of the yeast MutS homolog family, but its function in DNA metabolism differs from the functions of other yeast MutS homologs.