Expansion of CAG/CTG trinucleotide repeats is associated with certain familial neurological disorders, including Huntington's disease. Increasing evidence suggests that formation of a stable DNA hairpin within CAG/CTG repeats during DNA metabolism contributes to their expansion. However, the molecular mechanism(s) by which cells remove CAG/CTG hairpins remain unknown. Here we demonstrate that human cell extracts can catalyze error-free repair of CAG/CTG hairpins in a nick-directed manner. The repair system specifically targets CAG/CTG tracts for incisions in the nicked DNA strand, followed by DNA resynthesis using the continuous strand as a template, thereby ensuring CAG/CTG stability. Proliferating cell nuclear antigen (PCNA) is required for the incision step of the hairpin removal, which uses distinct endonuclease activities for individual CAG/CTG hairpins depending on their strand locations and/or secondary structures. We discuss the implications of these data for understanding the etiology of neurological diseases and trinucleotide repeat instability.