MutSalpha (MSH2/MSH6) and MutSbeta (MSH2/MSH3) are eukaryotic mismatch recognition proteins that preferentially process base-base and small insertion/deletion (ID) mispairs, respectively, despite the fact that cells contain a MutSalpha:MutSbeta ratio of 10:1. To explore the mechanism underlying the differential mismatch recognition by these two proteins, purified human MutSalpha and MutSbeta were analyzed individually and competitively for their abilities to interact with a T-G and an ID substrate. We show that MutSalpha has K(D) values of 26.5 and 38.2 nm for the G-T and ID substrates, respectively, and that MutSbeta has K(D) values of 76.5 and 23.5 nm for G-T and ID, respectively. Consistent with these results, competitive binding assays revealed the following relative binding affinities: MutSbeta-ID > MutSalpha-T-G > MutSalpha-ID >> MutSbeta-T-G. Interestingly, binding of MutSbeta to ID heteroduplexes is greatly stimulated when the MutSalpha:MutSbeta ratio is > or = 10. Distinct ATP/ADP binding and ATPase activities of MutSalpha and MutSbeta were also observed. In the absence of DNA, ADP binding and ATPase activities of MutSbeta are significantly higher than those of MutSalpha. However, interaction with DNA significantly stimulates the MutSalpha ATPase activity and reduces the MutSbeta ATPase activity, the consequence being that both proteins exhibit the same level of hydrolytic activity. We conclude that the preferential processing of base-base and ID heteroduplexes by MutSalpha and MutSbeta is determined by their significant differences in ATPase activity, ADP binding activity, and high cellular MutSalpha:MutSbeta ratio.