DNA mismatch repair (DMR) functions to maintain genome stability. Prokaryotic and eukaryotic cells deficient in DMR show a microsatellite instability (MSI) phenotype characterized by repeat length alterations at microsatellite sequences. Mice deficient in Pms2, a mammalian homolog of bacterial mutL, develop cancer and display MSI in all tissues examined, including the male germ line where a frequency of approximately 10% was observed. To determine the consequences of maternal DMR deficiency on genetic stability, we analyzed F(1) progeny from Pms2(-/-) female mice mated with wild-type males. Our analysis indicates that MSI in the female germ line was approximately 9%. MSI was also observed in paternal alleles, a surprising result since the alleles were obtained from wild-type males and the embryos were therefore DMR proficient. We propose that mosaicism for paternal alleles is a maternal effect that results from Pms2 deficiency during the early cleavage divisions. The absence of DMR in one-cell embryos leads to the formation of unrepaired replication errors in early cell divisions of the zygote. The occurrence of postzygotic mutation in the early mouse embryo suggests that Pms2 deficiency is a maternal effect, one of a limited number identified in the mouse and the first to involve a DNA repair gene.