The mechanism by which modified single-stranded oligonucleotides (MSSOs) direct base changes in genes is not completely understood, but there is evidence that DNA damage, repair and cell cycle checkpoint proteins are involved in the targeted nucleotide exchange (TNE) process. We are interested in the role of the mismatch repair protein, Msh2 in the correction of a frameshift mutation in both yeast and mammalian cells. We show that this protein exerts different and opposing influences on the TNE reaction in MSH2 deficient yeast compared to MSH2(-/-) mammalian cells and in wild-type cells that have RNAi silenced Msh2. Data from yeast show a 10-fold decrease in the targeting frequency whereas mammalian cells have an elevated correction frequency. These results show that in yeast this protein is required for efficient targeting and may play a role in mismatch recognition and repair. In mammalian cells, Msh2 plays a suppressive role in TNE reaction by either precluding the oligonucleotide annealing to the target gene or by maintenance of a cell cycle checkpoint induced by the MSSO itself. These results reveal that the mechanism of TNE between yeast and mammalian cells is not conserved, and demonstrate that the suppression of the TNE reaction can be bypassed using RNAi against MSH2 designed to knockdown its expression.