The primary role of the mismatch repair (MMR) system is the avoidance of mutations caused by replication and recombination errors. Furthermore, the lethality of methylating agents has been attributed to the processing of O(6)-methylguanine lesions in DNA by MMR. Loss of the MSH2 protein completely abolishes repair function and results in reduced cell killing by methylating agents and accelerated accumulation of methylation-damage-induced mutations. This has raised the question as to whether MMR is also involved in the cellular response to other genotoxic insults. Here we describe that in mice deficient for Msh2, lymphomagenesis was strongly accelerated by an ethylating agent, N-ethyl-N-nitrosourea (ENU), given at a dose that did not induce lymphomas in wild-type mice. This suggests that MMR deficiency and ENU-induced mutagenesis synergistically collaborate in inducing tumorigenesis. To study the interaction between MMR and ENU-induced DNA damage, we compared the lethality and mutagenicity of ENU in MSH2-proficient and -deficient mouse embryonic stem cells. Although MSH2-deficiency only slightly reduced the lethality of ENU, it strongly enhanced the mutagenicity of ENU. Mutation analysis of ENU-induced Hprt mutants revealed that base substitutions occurred predominantly at A-T base-pairs. These results suggest that MMR modulates the processing of ethylation damage at AT base-pairs.