The human lymphoblastoid MT1 B-cell line was previously isolated as one of a series of mutant cells able to survive the cytotoxic effects of N-methyl-N'-nitro-N-nitrosoguanidine (MNNG). MT1 cells nevertheless remain sensitive to mutagenesis by MNNG and display a mutator phenotype. These phenotypes have been attributed to a single genetic alteration postulated to confer a defect in strand-specific mismatch repair, a proposal that attributes the cytotoxic effect of DNA alkylation in wild-type cells to futile attempts to correct mispairs that arise during replication of alkylated template strands. Our results support this view. MNNG-induced mutations in the HPRT gene of MT1 cells are almost exclusively G.C-->A.T transitions, while spontaneous mutations observed in this mutator cell line are single-nucleotide insertions, transversions, and A.T-->G.C transitions. In vitro assay has demonstrated that the MT1 line is in fact deficient in strand-specific correction of all eight base-base mispairs. This defect, which is manifest at or prior to the excision stage of the reaction, is due to simple deficiency of a required activity because MT1 nuclear extracts can be complemented by a partially purified HeLa fraction to restore in vitro repair. These findings substantiate the idea that strand-specific mismatch repair contributes to alkylation-induced cytotoxicity and imply that this process serves as a barrier to spontaneous transition, transversion, and insertion/deletion mutations in mammalian cells.