Plasmid heteroduplexes were constructed that contain 1, 2, 3, 4, or 5 unpaired bases within the mnt gene. These were used to assess the efficiency of repair of small heterologous sequences ("heterologies") in DNA by the Escherichia coli Dam-directed mismatch repair system. Heteroduplexes in defined states of methylation at d(GATC) sites were used to transform a repair-proficient indicator strain (which has a mnt-lac fusion coding for a nonfunctional mnt repressor) and its isogenic mutH, -L, and -S derivatives. Using this in vivo transformation system, we scored for repair on the basis of colony color: correction in favor of the strand bearing mnt+ coding information gives rise to colonies that are white, whereas correction on the opposite strand (mnt-) yields colonies that are red when grown on MacConkey agar. Failure to repair a heterology yields colonies that are both red and white ("mixed"). The correction efficiencies of two heteroduplexes, each containing a single G.T mismatch within mnt, were also monitored for purposes of comparison. Our results show that mutHLS-dependent, methyl-directed repair of heteroduplexes with 1-, 2-, and 3-base deletions is as highly efficient as the repair of G.T mismatches. Heteroduplexes with a 4-base deletion are marginally repaired and DNA with a 5-base deletion is not detectably repaired. In addition, we show that purified MutS protein from Salmonella typhimurium, which can substitute for E. coli MutS in vivo, binds to oligonucleotide duplexes containing 1, 2, 3, and 4 unpaired bases of a sequence identical with that used for the in vivo studies. Specific binding of MutS to homoduplex DNA and to DNA that had undergone a 5-base deletion was not observed.