The mismatch repair (MMR) system plays a major role in removing DNA polymerization errors, and loss of this pathway results in hereditary cancers characterized by microsatellite instability. We investigated microsatellite stability during DNA replication within human postmeiotic segregation 2 (hPMS2)-deficient and proficient human lymphoblastoid cell lines. Using a shuttle vector assay, we measured mutation rates at reporter cassettes containing defined mononucleotide, dinucleotide, and tetranucleotide microsatellite sequences. A mutator phenotype was observed in the hPMS2-deficient cell line. The mutation rate of vectors containing [G/C](10) or [GT/CA](10) alleles was elevated 20-fold to 40-fold in hPMS2-deficient cells, relative to an hPMS2-expressing cell line. We observed a 6-fold and 12-fold relative increase in mutation rate of [TTTC/AAAG](9) and [TTCC/AAGG](9) sequences, respectively, in hPMS2-deficient cells. Mutational specificity analyses suggested that repair by hPMS2 is biased. In the absence of hPMS2, a greater number of microsatellite expansion versus deletion mutations was observed, and expansion rates of the tetranucleotide alleles were similar. In the presence of hPMS2, we observed a 29-fold decrease in the [TTCC/AAGG](9) expansion rate but only a 6-fold decrease for the [TTTC/AAAG](9) allele. Our data indicate that hPMS2 is more protective of tetranucleotide expansions than deletions and that hPMS2 displays a sequence bias, wherein [TTCC/AAGG] sequences are stabilized to a greater extent than [TTTC/AAAG]. Our results allow for greater accuracy during identification of MMR defects by providing a mutational signature characteristic of hPMS2 defect. This study also provides clues to possible mechanisms of repair by hPMS2 in the context of the MMR system.