Repair of loop mismatches was investigated in wild-type and mismatch binding-defective Chinese hamster ovary (CHO) cells. Loop mismatches were formed in vivo during extrachromosomal recombination between heteroallelic plasmid substrates. Recombination was expected to occur primarily by single-strand annealing (SSA), yielding 12- or 26-base nonpalindromic loop mismatches, and 12-, 26-, or 40-base palindromic loop mismatches. Nonpalindromic loops were repaired efficiently and with bias toward loop loss. In contrast, the 12-base palindromic loop was repaired with bias toward loop retention, indicating that repair bias depends on loop structure. Among the palindromic loops, repair bias was dependent on loop length, with bias shifting from loop retention to loop loss with increasing loop size. For both palindromic and nonpalindromic loops, repair efficiencies and biases were independent of the general (MSH/MLH) mismatch repair pathway. These results are discussed with respect to the maintenance of large nonpalindromic insertions, and of small and large palindromes, in eukaryotic genomes.