Previous studies reported the reconstitution of an Mlh1-Pms1-independent 5' nick-directed mismatch repair (MMR) reaction using Saccharomyces cerevisiae proteins. Here we describe the reconstitution of a mispair-dependent Mlh1-Pms1 endonuclease activation reaction requiring Msh2-Msh6 (or Msh2-Msh3), proliferating cell nuclear antigen (PCNA), and replication factor C (RFC) and a reconstituted Mlh1-Pms1-dependent 3' nick-directed MMR reaction requiring Msh2-Msh6 (or Msh2-Msh3), exonuclease 1 (Exo1), replication protein A (RPA), RFC, PCNA, and DNA polymerase δ. Both reactions required Mg(2+) and Mn(2+) for optimal activity. The MMR reaction also required two reaction stages in which the first stage required incubation of Mlh1-Pms1 with substrate DNA, with or without Msh2-Msh6 (or Msh2-Msh3), PCNA, and RFC but did not require nicking of the substrate, followed by a second stage in which other proteins were added. Analysis of different mutant proteins demonstrated that both reactions required a functional Mlh1-Pms1 endonuclease active site, as well as mispair recognition and Mlh1-Pms1 recruitment by Msh2-Msh6 but not sliding clamp formation. Mutant Mlh1-Pms1 and PCNA proteins that were defective for Exo1-independent but not Exo1-dependent MMR in vivo were partially defective in the Mlh1-Pms1 endonuclease and MMR reactions, suggesting that both reactions reflect the activation of Mlh1-Pms1 seen in Exo1-independent MMR in vivo. The availability of this reconstituted MMR reaction should now make it possible to better study both Exo1-independent and Exo1-dependent MMR.