The DNA mismatch repair (MMR) system functions in the elimination of biosynthetic errors that arise during DNA replication, in DNA damage surveillance, and in the prevention of recombination between non-identical sequences. It therefore substantially contributes to the maintenance of genome integrity. It is thus not surprising that loss of MMR function may lead to cancer. Inherited defects due to germline mutations in the MMR genes underlie the hereditary non-polyposis colon cancer (HNPCC) syndrome in humans, and epigenetic silencing of the hMLH1 gene accounts for sporadic cancers, including those of the endometrium and ovaries. Another hallmark of MMR is its capacity to elicit DNA damage-induced cell death. Although this might seem to make MMR a useful target for anticancer agents, it has become clear that tumor cells with defective MMR display reduced sensitivity to the cytotoxic effect of DNA damaging agents such as alkylating agents and cisplatin. This is of clinical relevance, as these agents provide MMR-deficient tumor cells a growth advantage. This effect is exacerbated by the potential of some agents to cause the de novo generation of MMR-resistant variants. Thus, the discovery of antitumor agents that retain sensitivity against or specifically target MMR-deficient tumor cells, and the development of strategies to overcome MMR-related drug resistance assumes clinical importance. Efforts have been taken in the past years to come to a better understanding of the molecular mechanisms of MMR, including those underlying MMR-related tumorigenesis, those determining the substrate-specificity of MMR-dependent damage recognition, and those linking damage recognition to cell death responses. This information is also expected to contribute to the establishment of diagnostic methods to screen for MMR gene mutations in tumors and to the development of strategies which enable the oncologists to apply appropriate and specific regimens for tumor treatment.