Heterozygosity for germ-line mutations in the DNA mismatch repair gene MSH2 predisposes humans to cancer. Here we use a highly sensitive reporter to describe a spontaneous mutator phenotype in diploid yeast cells containing a deletion of only one MSH2 allele. We also identify five MSH2 missense mutations that have dominant mutator effects in heterozygous cells when expressed at normal levels from the natural MSH2 promoter. For example, a 230-fold mutator effect is observed in an MSH2/msh2 diploid strain in which Gly693, which is invariant in MutS homologs and involved in ATP hydrolysis, is changed to alanine. DNA binding data suggest that mismatch repair is suppressed by binding of a mutant Msh2-Msh6 heterodimer to a mismatch with subsequent inability to dissociate from the mismatch in the presence of ATP. A dominant mutator effect also is observed in yeast when Gly693 is changed to serine. An early onset colorectal tumor is heterozygous for the analogous Gly --> Ser mutation in hMSH2, and a second hMSH2 mutation was not found, suggesting that this missense mutation may predispose to cancer via a dominant mutator effect. The mutator effects of the deletion mutant and the Gly --> Ala missense mutant in yeast MSH2 are enhanced by heterozygosity for a missense mutation in DNA polymerase delta that reduces its proofreading activity but is not a mutator in the heterozygous state. The synergistic effects of heterozygosity for mutations in two different genes that act in series to correct replication errors may be relevant to cancer predisposition.