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The fate of heteroduplex molecules containing 5-, 7-, 9-, 192-, 410-, and 514-base loops after transformation of wild-type and various mutant strains of Escherichia coli has been examined. No evidence for repair was obtained for the wild type or for strains with mutations in the following genes: mutS, recA, recBC sbcBC, recD, recF, recJ, recN, recO, recR, recBC sbcBC recF uvrA, recG ruvC, ruvB, lexA3, lexA51, uvrA, nfo xth nth, polA(Ts), or pcnB. These results rule out the involvement of the SOS system and most known recombination and repair pathways. Repair of heteroduplex molecules containing 410- and 514-base loops was observed when a 1-base deletion-insertion mismatch was present nearby. The repair of both the mismatch and the loops was directed by the state of dam methylation of the DNA chains and was dependent on the product of the mutS gene. A high efficiency of repair (95%) was found even when the mismatch and the loops were 1,448 nucleotides apart. We conclude that multibase loops in DNA can be removed only as a consequence of corepair by dam-directed mismatch repair.