In living cells, a great amount of DNA damage arises as a result of errors during DNA replication, genetic recombination, and other processes (1). Because the accumulation of such damage can result in various genetic diseases, many DNA repair systems have evolved to remove any lesions. One of these systems is the mismatch repair (MMR), 2 which is conserved throughout all organisms (2). It is known that inactivation of MMR in humans has been implicated in over 90% of hereditary nonpolyposis colorectal cancers (3). The mechanism of MMR has been well characterized in Escherichia coli, and the reconstituted system has been established (4). The early reactions in the E. coli MMR are performed by the MutHLS system (5, 6), which consists of three proteins, MutS, MutL, and MutH. In this system, a mismatched base in double-stranded DNA (dsDNA) is recognized by a MutS dimer. A MutL dimer interacts with the MutS-mismatched DNA complex and stabilizes its complex, and then the MutH endonuclease is activated by MutL. MutH nicks the unmethylated strand at the hemimethylated GATC site to provide an entry point for the excision and to direct the repair to the new DNA strand. To complete the repair, the strand containing the error is removed by helicases and exonucleases, and a new strand is synthesized by DNA polymerase III holoenzyme and ligase. Homologues of E. coli MutS and MutL exist in the majority of organisms (Fig. 1A), suggesting that MMR is a common repair mechanism among those species. However, despite the prevalence of the MMR system, no homologue of E. coli MutH has been identified in the majority of organisms (7; Fig. 1A). Therefore, in organisms lacking mutH, the MMR had not been well understood.The research for the primary reactions in the eukaryotic MMR relies on homologues of bacterial MutS and MutL. Many studies on the mammalian MMR have shown that a strand discontinuity serves as a signal that directs the repair to one strand of the mismatched heteroduplex (2, 4). The discontinuities in the newly synthesized strands such as the 3Ј ends or termini of Okazaki fragments may designate which strand is to be repaired. For biochemical characterization of MMR, the nicked circular heteroduplex has been used as a substrate containing a strand discontinuity. It has been shown that the excision system in MMR selects the shorter path from a nick to a mismatch (8). Therefore, the distinction between 5Ј-and 3Ј-directed MMR should exist. Interestingly, 5Ј-to 3Ј-exonuclease activity of Exo I is required for both 5Ј-and 3Ј-directed removal (9, 10). Recently, Modrich and co-workers (11, 12) explained how 3Ј-directed excision is performed by the 5Ј-to 3Ј-exonuclease activity of ExoI. They demonstrated that a human MutL homologue, MutL␣ (MLH1-PMS2 heterodimer), is a latent endonuclease that incises on both sides of a mismatch, and the 5Ј-to 3Ј-exonuclease activity of ExoI removes the DNA segment spanning the mismatch. They also showed that MutL␣, in the presence of manganese ions, incises a supercoiled homoduplex without other MMR...