In mammalian cells, several features of the way homologous recombination occurs between transferred and chromosomal DNA are consistent with the double-strand-break repair (DSBR) model of recombination. In this study, we examined the segregation patterns of small palindrome markers, which frequently escape mismatch repair when encompassed within heteroduplex DNA formed in vivo during mammalian homologous recombination, to test predictions of the DSBR model, in particular as they relate to the mechanism of crossover resolution. According to the canonical DSBR model, crossover between the vector and chromosome results from cleavage of the joint molecule in two alternate sense modes. The two crossover modes lead to different predicted marker configurations in the recombinants, and assuming no bias in the mode of Holliday junction cleavage, the two types of recombinants are expected in equal frequency. However, we propose a revision to the canonical model, as our results suggest that the mode of crossover resolution is biased in favor of cutting the DNA strands upon which DNA synthesis is occurring during formation of the joint molecule. The bias in junction resolution permitted us to examine the potential consequences of mismatch repair acting on the DNA breaks generated by junction cutting. The combination of biased junction resolution with both early and late rounds of mismatch repair can explain the marker patterns in the recombinants.