We have identified a gene in Saccharomyces cerevisiae, MSH3, whose predicted protein product shares extensive sequence similarity with bacterial proteins involved in DNA mismatch repair as well as with the predicted protein product of the Rep-3 gene of mouse. MSH3 was obtained by performing a polymerase chain reaction on yeast genomic DNA using degenerate oligonucleotide primers designed to anneal with the most conserved regions of a gene that would be homologous to Rep-3 and Salmonella typhimurium mutS. MSH3 seems to play some role in DNA mismatch repair, inasmuch as its inactivation results in an increase in reversion rates of two different mutations and also causes an increase in postmeiotic segregation. However, the effect of MSH3 disruption on reversion rates and postmeiotic segregation appears to be much less than that of previously characterized yeast DNA mismatch repair genes. Alignment of the MSH3 sequence with all of the known MutS homologues suggests that its primary function may be different from the role of MutS in repair of replication errors. MSH3 appears to be more closely related to the mouse Rep-3 gene and other similar eukaryotic mutS homologues than to the yeast gene MSH2 and other mutS homologues that are involved in replication repair. We suggest that the primary function of MSH3 may be more closely related to one of the other known functions of mutS, such as its role in preventing recombination between non-identical sequences.