MutS and MutL homologs have been implicated in multiple genetic stabilization pathways. The activities participate in the correction of DNA biosynthetic errors, are involved in cellular responses to certain types of DNA damage, and serve to ensure the fidelity of genetic recombination. We show here that the rate of CAD (carbamyl-P synthetase/aspartate transcarbamylase/dihydroorotase) gene amplification is elevated 50- to 100-fold in human cell lines deficient in MLH1 or MSH6, as compared with mismatch repair-proficient control cells. Fluorescence in situ hybridization indicates that these amplification events are the probable consequence of unequal sister chromatid exchanges involving chromosome 2, as well as translocation events involving other chromosomes. These results implicate MutS alpha and MutL alpha in the suppression of gene amplification and suggest that defects in this genetic stabilization function may contribute to the cancer predisposition associated with mismatch repair deficiency.