We have used a novel method to activate the DNA damage S-phase checkpoint response in Saccharomyces cerevisiae to slow lagging-strand DNA replication by exposing cells expressing a drug-sensitive DNA polymerase δ (L612M-DNA pol δ) to the inhibitory drug phosphonoacetic acid (PAA). PAA-treated pol3-L612M cells arrest as large-budded cells with a single nucleus in the bud neck. This arrest requires all of the components of the S-phase DNA damage checkpoint: Mec1, Rad9, the DNA damage clamp Ddc1-Rad17-Mec3, and the Rad24-dependent clamp loader, but does not depend on Mrc1, which acts as the signaling adapter for the replication checkpoint. In addition to the above components, a fully functional mismatch repair system, including Exo1, is required to activate the S-phase damage checkpoint and for cells to survive drug exposure. We propose that mismatch repair activity produces persisting single-stranded DNA gaps in PAA-treated pol3-L612M cells that are required to increase DNA damage above the threshold needed for checkpoint activation. Our studies have important implications for understanding how cells avoid inappropriate checkpoint activation because of normal discontinuities in lagging-strand replication and identify a role for mismatch repair in checkpoint activation that is needed to maintain genome integrity.