DNA mismatch repair maintains genomic stability by detecting and correcting mispaired DNA sequences and by signaling cell death when DNA repair fails. The mechanism by which mismatch repair coordinates DNA damage and repair with cell survival or death is not understood, but it suggests the need for regulation. Since the functions of mismatch repair are initiated in the nucleus, we asked whether nuclear transport of MLH1 and PMS2 is limiting for the nuclear localization of MutLalpha (the MLH1-PMS2 dimer). We found that MLH1 and PMS2 have functional nuclear localization signals (NLS) and nuclear export sequences, yet nuclear import depended on their C-terminal dimerization to form MutLalpha. Our studies are consistent with the idea that dimerization of MLH1 and PMS2 regulates nuclear import by unmasking the NLS. Limited nuclear localization of MutLalpha may thus represent a novel mechanism by which cells fine-tune mismatch repair functions. This mechanism may have implications in the pathogenesis of hereditary non-polyposis colon cancer.