Meiotic recombination in Saccharomyces cerevisiae involves the formation of heteroduplexes, duplexes containing DNA strands derived from two different homologues. If the two strands of DNA differ by an insertion or deletion, the heteroduplex will contain an unpaired DNA loop. We found that unpaired loops as large as 5.6 kb can be accommodated within a heteroduplex. Repair of these loops involved the nucleotide excision repair (NER) enzymes Rad1p and Rad10p and the mismatch repair (MMR) proteins Msh2p and Msh3p, but not several other NER (Rad2p and Rad14p) and MMR (Msh4p, Msh6p, Mlh1p, Pms1p, Mlh2p, Mlh3p) proteins. Heteroduplexes were also formed with DNA strands derived from alleles containing two different large insertions, creating a large "bubble"; repair of this substrate was dependent on Rad1p. Although meiotic recombination events in yeast are initiated by double-strand DNA breaks (DSBs), we showed that DSBs occurring within heterozygous insertions do not stimulate interhomologue recombination.