DNA mismatch repair (MMR) sensitizes human and Escherichia coli dam cells to the cytotoxic action of N-methyl-N'-nitro-N-nitrosoguanidine (MNNG) while abrogation of such repair results in drug resistance. In DNA methylated by MNNG, MMR action is the result of MutS recognition of O6-methylguanine base pairs. MutS and Ada methyltransferase compete for the MNNG-induced O6-methylguanine residues, and MMR-induced cytotoxicity is abrogated when Ada is present at higher concentrations than normal. To test the hypothesis that MMR sensitization is due to decreased recombinational repair, we used a RecA-mediated strand exchange assay between homologous phiX174 substrate molecules, one of which was methylated with MNNG. MutS inhibited strand transfer on such substrates in a concentration-dependent manner and its inhibitory effect was enhanced by MutL. There was no effect of these proteins on RecA activity with unmethylated substrates. We quantified the number of O6-methylguanine residues in methylated DNA by HPLC-MS/MS and 5-10 of these residues in phiX174 DNA (5386 bp) were sufficient to block the RecA reaction in the presence of MutS and MutL. These results are consistent with a model in which methylated DNA is perceived by the cell as homeologous and prevented from recombining with homologous DNA by the MMR system.