A two-hybrid screen was used to identify Saccharomyces cerevisiae genes encoding proteins that interact with MSH2. One gene was found to encode a homologue of Schizosaccharomyces pombe EXO1, a double-stranded DNA-specific 5-3 exonuclease. S. cerevisiae EXO1 interacted with both S. cerevisiae and human MSH2 in two-hybrid and coimmunoprecipitation experiments. exo1 mutants showed a mutator phenotype, and epistasis analysis was consistent with EXO1 functioning in the MSH2-dependent mismatch repair pathway. exo1 mutations were lethal in combination with rad27 mutations, and overexpression of EXO1 suppressed both the temperature sensitive and mutator phenotypes of rad27 mutants.Genetic and biochemical studies have indicated eukaryotes contain a mismatch repair (MMR) pathway related to the bacterial MutHLS pathway (reviewed in refs. 1 and 2). However, recent evidence suggests that eukaryotic MMR is more complex. In Saccharomyces cerevisiae there are two MMR pathways that require MSH2, a MutS homologue that recognizes mispaired bases (3, 4). One is a single base substitution mispair pathway that requires a complex of MSH2 and the MutS homologue MSH6 (also called GTBP or p160 in humans) (1-3). There is also an insertion͞deletion mispair pathway that requires either a complex of MSH2 and MSH6 or a complex of MSH2 and MSH3, a third MutS homologue (1-3). Additionally, four S. cerevisiae MutL homologues have been identified, PMS1 (PMS2 in humans) and MLH1-MLH3; PMS1 and MLH1 function in MMR and have been shown to form a heterodimer (1, 2).In vitro studies in Escherichia coli have shown that the excision step of MMR can occur either 5Ј to 3Ј or 3Ј to 5Ј of the initiating nick and requires the combination of a helicase (UvrD) and one of three single-stranded DNA exonucleases (Exo I, Exo VII or RecJ) (reviewed in ref. 2). In eukaryotic MMR, proteins involved in excising the mispair have not been identified, although some candidates have been suggested. These include S. cerevisiae RAD27 (RTH1, YKL510), a 5Ј-3Ј exonuclease and flap endonuclease (5), and Schizosaccharomyces pombe EXO1 and its Drosophila homologue Tosca, which are members of the same family of endo-and exonucleases as RAD27 (6, 7).The importance of determining the mechanism of MMR is underscored by its association with hereditary nonpolyposis colorectal carcinoma (HNPCC) (reviewed in refs. 2 and 8). HNPCC is associated primarily with germ-line mutations in two human MMR genes, MSH2 and MLH1, whereas mutations in other MMR genes are rare (ref. 9; reviewed in refs. 2 and 8). Somatic mutations in MMR genes have been found in some sporadic tumors, suggesting some sporadic cancers could be due to acquired mutations in MMR genes (reviewed in ref. 8, and see ref. 10). However, not all of HNPCC or sporadic cancers with mutator phenotypes can be accounted for by known MMR genes (9, 10). Consequently, there has been interest in identifying additional MMR genes. Here we describe the use of a two-hybrid screen to identify proteins that interact with MSH2 and function...