A two-hybrid screen was used to identify Saccharomyces cerevisiae genes encoding proteins that interact with MSH2. One gene was found to encode a homologue of Schizosaccharomyces pombe EXO1, a double-stranded DNA-specific 5'-3' exonuclease. S. cerevisiae EXO1 interacted with both S. cerevisiae and human MSH2 in two-hybrid and coimmunoprecipitation experiments. exo1 mutants showed a mutator phenotype, and epistasis analysis was consistent with EXO1 functioning in the MSH2-dependent mismatch repair pathway. exo1 mutations were lethal in combination with rad27 mutations, and overexpression of EXO1 suppressed both the temperature sensitive and mutator phenotypes of rad27 mutants.