Heteroduplexes that contain single-stranded loops are repaired very efficiently in mammalian cells. The strand that does not contain the loop is used as the template strand for repair nearly twice as often as the looped strand. In this study we tested the influence of nearby nicks on the choice of template strand. We find that strand selection in repair of heteroduplexes with single-stranded loops is influenced by the presence of a nick located 71 or 125 base pairs from the loop, but only to a minor degree. Thus the loop itself is a stronger signal for repair than is a nearby nick. On the other hand, if a break is introduced into the single strand that forms the loop, the looped strand is marked for excision and rarely, if ever, is used as the template for repair.