Recombination between moderately divergent DNA sequences is impaired compared with identical sequences. In yeast, an HO endonuclease-induced double-strand break can be repaired by single-strand annealing (SSA) between flanking homologous sequences. A 3% sequence divergence between 205-bp sequences flanking the double-strand break caused a 6-fold reduction in repair compared with identical sequences. This reduction in heteroduplex rejection was suppressed in a mismatch repair-defective msh6⌬ strain and partially suppressed in an msh2 separation-offunction mutant. In mlh1⌬ strains, heteroduplex rejection was greater than in msh6⌬ strains but less than in wild type. Deleting PMS1, MLH2, or MLH3 had no effect on heteroduplex rejection, but a pms1⌬ mlh2⌬ mlh3⌬ triple mutant resembled mlh1⌬. However, correction of the mismatches within heteroduplex SSA intermediates required PMS1 and MLH1 to the same extent as MSH2 and MSH6. An SSA competition assay in which either diverged or identical repeats can be used for repair showed that heteroduplex DNA is likely to be unwound rather than degraded. This conclusion is supported by the finding that deleting the SGS1 helicase also suppressed heteroduplex rejection.G enetic recombination depends on the efficient and accurate search for homology between recipient and donor DNA substrates. Studies in both prokaryotes and eukaryotes have shown that mismatch repair proteins play a critical role in regulating this homology search during strand invasion (1, 2). A role for mismatch repair proteins in regulating recombination was first obtained in transformation studies performed in Pneumococcus. A small number of base-base differences between donor and recipient molecules significantly decreased the formation of stable transformants. This decrease, known as heteroduplex rejection, was suppressed by mutations in hexA and hexB, homologs of the Escherichia coli mismatch repair proteins MutS and MutL, respectively (3,4). The MutS and MutL proteins play key roles in the repair of base pair mismatches; MutS binds to mispairs and MutL appears to interact with MutS-mispair complexes to initiate downstream mismatch repair steps (5-8). Subsequent studies in bacteria, yeast, and humans showed that mismatch repair plays a critical role in repressing recombination between moderately divergent (homeologous) sequences (9-12).In Saccharomyces cerevisiae repair of mismatches arising during DNA replication or through heteroduplex DNA formation during recombination depends on the activity of several MutS and MutL homologs. Msh2p, Msh3p, Msh6p, and two MutL homologs, Mlh1p and Pms1p, have been shown to play major roles in mismatch repair, whereas two other MutL homologs, Mlh2p and Mlh3p, play specialized roles (13-19). These proteins appear to function as heterodimers in mismatch repair, because Msh2p-Msh3p, Msh2p-Msh6p, Mlh1p-Pms1p, Mlh1p-Mlh3p, and Mlh1p-Mlh2p complexes have been identified (20). Furthermore, the Msh2p-Msh6p complex shows a strong selectivity for base pair substitutions, whereas Msh2p-Ms...