The expansion of normally polymorphic CTG microsatellites in certain human genes 
has been identified as the causative mutation of a number of hereditary 
neurological disorders, including Huntington's disease and myotonic dystrophy. 
Here, we have investigated the effect of methyl-directed mismatch repair (MMR) 
on the stability of a (CTG)43 repeat in Escherichia coli over 140 generations 
and find two opposing effects. In contrast to orientation-dependent repeat 
instability in wild-type E. coli and yeast, we observed no orientation 
dependence in MMR- E. coli cells and suggest that, for the repeat that we have 
studied, orientation dependence in wild-type cells is mainly caused by 
functional mismatch repair genes. Our results imply that slipped structures are 
generated during replication, causing single triplet expansions and contractions 
in MMR- cells, because they are left unrepaired. On the other hand, we find that 
the repair of such slipped structures by the MMR system can go awry, resulting 
in large contractions. We show that these mutS-dependent contractions arise 
preferentially when the CTG sequence is encoded by the lagging strand. The 
nature of this orientation dependence argues that the small slipped structures 
that are recognized by the MMR system are formed primarily on the lagging strand 
of the replication fork. It also suggests that, in the presence of functional 
MMR, removal of 3 bp slipped structures causes the formation of larger 
contractions that are probably the result of secondary structure formation by 
the CTG sequence. We rationalize the opposing effects of MMR on repeat tract 
stability with a model that accounts for CTG repeat instability and loss of 
orientation dependence in MMR- cells. Our work resolves a contradiction between 
opposing claims in the literature of both stabilizing and destabilizing effects 
of MMR on CTG repeat instability in E. coli.