Recombination events between non-identical sequences most often involve heteroduplex DNA intermediates that are subjected to mismatch repair. The well-characterized long-patch mismatch repair process, controlled in eukaryotes by bacterial MutS and MutL orthologs, is the major system involved in repair of mispaired bases. Here we present evidence for an alternative short-patch mismatch repair pathway that operates on a broad spectrum of mismatches. In msh2 mutants lacking the long-patch repair system, sequence analysis of recombination tracts resulting from exchanges between similar but non-identical (homeologous) parental DNAs showed the occurrence of short-patch repair events that can involve <12 nucleotides. Such events were detected both in mitotic and in meiotic recombinants. Confirming the existence of a distinct short-patch repair activity, we found in a recombination assay involving homologous alleles that closely spaced mismatches are repaired independently with high efficiency in cells lacking MSH2 or PMS1. We show that this activity does not depend on genes required for nucleotide excision repair and thus differs from the short-patch mismatch repair described in Schizosaccharomyces pombe.