Recent studies have shown that Saccharomyces cerevisiae Msh2p and Msh6p form a complex that specifically binds to DNA containing base pair mismatches. In this study, we performed a genetic and biochemical analysis of the Msh2p-Msh6p complex by introducing point mutations in the ATP binding and putative helix-turn-helix domains of MSH2. The effects of these mutations were analyzed genetically by measuring mutation frequency and biochemically by measuring the stability, mismatch binding activity, and ATPase activity of msh2p (mutant msh2p)-Msh6p complexes. A mutation in the ATP binding domain of MSH2 did not affect the mismatch binding specificity of the msh2p-Msh6p complex; however, this mutation conferred a dominant negative phenotype when the mutant gene was overexpressed in a wild-type strain, and the mutant protein displayed biochemical defects consistent with defects in mismatch repair downstream of mismatch recognition. Helix-turn-helix domain mutant proteins displayed two different properties. One class of mutant proteins was defective in forming complexes with Msh6p and also failed to recognize base pair mismatches. A second class of mutant proteins displayed properties similar to those observed for the ATP binding domain mutant protein. Taken together, these data suggested that the proposed helix-turn-helix domain of Msh2p was unlikely to be involved in mismatch recognition. We propose that the MSH2 helix-turn-helix domain mediates changes in Msh2p-Msh6p interactions that are induced by ATP hydrolysis; the net result of these changes is a modulation of mismatch recognition.