Although the occurrence of 5-methylcytosine (m5C) in DNA is widespread, the function of this modified base remains unclear. At some specific sites it apparently has an effect in controlling gene expression, but many sites do not appear to be involved in this regulation. Balanced against its regulatory usefulness at some sites is the mutational risk it imposes upon the cell. Deamination of m5C can lead to its replacement by thymine (T). One possible role for excess methylation is strand discrimination in the repair of mismatches. We constructed the complementary hemimethylated single-base-pair mismatches, G T and A C, at a CG site in simian virus 40 DNA, transfected these into the host African green monkey kidney cells (CV-1), and examined DNA of the progeny for repair at this site. Hemimethylation at two Hha I sites (Gm5CGC) bracketing the mismatch directed repair to occur only on the unmethylated strand. Methylation at the multiple Cm5CATGG and Gm6ATC sites, a pattern normally seen in bacteria, also instructed repair to proceed on the unmethylated strand, although less efficiently. Hemimethylation at only one site, adjacent to the mispaired bases (Hpa II, Cm5CGG) produced repaired molecules in a ratio that may represent random repair of the A C mismatch and strand-directed repair in the complementary G T mismatch. The -mCG- -GT- mismatch could result from deamination of m5C in the most commonly methylated dinucleotide in vertebrates, CpG. Methylation may be able to compensate for the errors it causes by serving as a mechanism for strand discrimination in correcting those errors. In addition, single-strand nicks were also shown to direct repair.