The human colon tumor cell line HCT 116 is known to have a homozygous mutation in the mismatch repair gene hMLH1 on human chromosome 3, to exhibit microsatellite instability, and to be defective in mismatch repair. In order to determine whether the introduction of a normal copy of hMLH1 gene restores mismatch repair activity and corrects microsatellite instability, a single human chromosome 3 from normal fibroblasts was transferred to HCT 116 cells via microcell fusion. As a control, human chromosome 2 was also transferred to HCT 116 cells. Two HCT 116 microcell hybrid clones that received a single copy of chromosome 2 (HCT 116 + ch2) and two that received a single copy of chromosome 3 (HCT 116 + ch3) were isolated and characterized. A G-G mismatch in M13-derived heteroduplex DNA was efficiently repaired in cell extracts from HCT 116 + ch3 cells, but not in those of parent HCT 116 cells or HCT 116 + ch2 cells. Microsatellite alterations at the D5S107 locus containing CA repeats were seen in 8 of 80 subclones from HCT 116 cells, and in 13 of 150 subclones from HCT 116 + ch2 cells. In contrast, none of the 225 subclones derived from mismatch repair-proficient HCT 116 + ch3 cells showed alterations in the microsatellite at the same locus. The effect of introducing chromosome 3 on the sensitivity of HCT 116 cells to N-methyl-N'-nitro-N-nitrosoguanidine (MNNG) was examined, since enhanced tolerance to MNNG is accompanied by loss of mismatch repair activity in several cell lines. Within 3 days after treatment with 5 microM MNNG, HCT 116 + ch3 cells became morphologically flat and stopped growing. Their colony-forming ability, determined 10 days after treatment, was reduced 200-fold when compared to MNNG-treated parental HCT 116 and HCT 116 + ch2 cells. These results support the hypothesis that mutations in both alleles of the hMLH1 gene are necessary for the manifestation of defective mismatch repair and microsatellite instability and for enhanced MNNG tolerance. The results also suggest that the mismatch repair system contributes to the process that causes growth arrest in response to DNA damage by alkylating agents.