Single base mispairs and small loops are corrected by DNA mismatch repair, but little is known about the corrrection of large loops. In this paper, large loop repair was examined in nuclear extracts of yeast, Biochemical assays showed that repair activity occurred on loops of 16, 27, and 216 bases, whereas a G-T mispair and an 8-base loop were poorly corrected under these conditions. Two modes of loop repair were revealed by comparison of heteroduplexes that contained a site-specific nick or were covalently closed. A nick-stimulated repair mode directs correction to the discontinuous strand, regardless of which strand contains the leap. An alternative mode is nick-independent and preferentially removes the loop. Both outcomes of repair were largely eliminated when DNA replication was inhibited, suggesting a requirement for repair synthesis. Excision tracts of 100-200 nucleotides, spanning the position of the loop, were observed on each strand under conditions of limited DNA repair synthesis. Both repair modes were independent of the mismatch correction genes 2MSH2, MSH3, MLH1, and PMS1, as judged by activity in mutant extracts. Together the loop specificity and mutant results furnish evidence for a large loop repair pathway in yeast that is distinct from mismatch repair.