MutL homologs belong to a family of proteins that share a conserved ATP binding site. We demonstrate that amino-terminal domains of the yeast MutL homologs Mlh1 and Pms1 required for DNA mismatch repair both possess independent, intrinsic ATPase activities. Amino acid substitutions in the conserved ATP binding sites concomitantly reduce ATP binding, ATP hydrolysis, and DNA mismatch repair in vivo. The ATPase activities are weak consistent with the hypothesis that ATP binding is primarily responsible for modulating interactions with other MMR components. Three approaches, ATP hydrolysis assays, limited proteolysis protection, and equilibrium dialysis, provide evidence that the amino-terminal domain of MIh1 binds ATP with >10-fold higher affinity than does the amino-terminal domain of Pms1. This is consistent with a model wherein ATP may first bind to MIh1, resulting in events that permit ATP binding to Pms1 and later steps in DNA mismatch repair.