The involvement of the E. coli methyl-directed and very short patch (vsp) mismatch repair systems in bacteriophage lambda recombination has been studied. Genetic crosses and heteroduplex transfection experiments were performed using lambda phages with sequenced mutations in the cl gene. The results indicate that methyl-directed repair does operate during bacteriophage lambda recombination but generally does not contribute to the formation of recombinants involving close markers. Vsp repair apparently acts during bacteriophage lambda recombination to produce recombinants involving close markers because its action does not involve extensive excision tracts. Marker-specific hyperrecombination and the apparent clustering of genetic exchanges in bacteriophage lambda recombination can be accounted for by the action of the vsp repair system.