Spontaneous and double-strand break (DSB)-induced allelic recombination in yeast was investigated in crosses between ura3 heteroalleles inactivated by an HO site and a +1 frameshift mutation, with flanking markers defining a 3.4-kbp interval. In some crosses, nine additional phenotypically silent RFLP mutations were present at approximately 100-bp intervals. Increasing heterology from 0.2 to 1% in this interval reduced spontaneous, but not DSB-induced, recombination. For DSB-induced events, 75% were continuous tract gene conversions without a crossover in this interval; discontinuous tracts and conversions associated with a crossover each comprised approximately 7% of events, and 10% also converted markers in unbroken alleles. Loss of heterozygosity was seen for all markers centromere distal to the HO site in 50% of products; such loss could reflect gene conversion, break-induced replication, chromosome loss, or G2 crossovers. Using telomere-marked strains we determined that nearly all allelic DSB repair occurs by gene conversion. We further show that most allelic conversion results from mismatch repair of heteroduplex DNA. Interestingly, markers shared between the sparsely and densely marked interval converted at higher rates in the densely marked interval. Thus, the extra markers increased gene conversion tract lengths, which may reflect mismatch repair-induced recombination, or a shift from restoration- to conversion-type repair.