During meiotic recombination, homologue-templated repair of programmed DNA double-strand breaks (DSBs) produces relatively few crossovers and many difficult-to-detect non-crossovers. By intercrossing two diverged mouse subspecies over five generations and deep-sequencing 119 offspring, we detect thousands of crossover and non-crossover events genome-wide with unprecedented power and spatial resolution. We find that both crossovers and non-crossovers are strongly depleted at DSB hotspots where the DSB-positioning protein PRDM9 fails to bind to the unbroken homologous chromosome, revealing that PRDM9 also functions to promote homologue-templated repair. Our results show that complex non-crossovers are much rarer in mice than humans, consistent with complex events arising from accumulated non-programmed DNA damage. Unexpectedly, we also find that GC-biased gene conversion is restricted to non-crossover tracts containing only one mismatch. These results demonstrate that local genetic diversity profoundly alters meiotic repair pathway decisions via at least two distinct mechanisms, impacting genome evolution and Prdm9-related hybrid infertility.