In budding yeast the DNA helicase Mph1 prevents genome rearrangements during ectopic homologous recombination (HR) by suppressing the formation of crossovers (COs). Here we show that during ectopic HR repair, the anti-CO function of Mph1 is intricately associated with the mismatch repair (MMR) factor, MutSα. In particular, during HR repair using a completely homologous substrate, we reveal an MMR-independent function of MutSα in generating COs that is specifically antagonized by Mph1, but not Sgs1. In contrast, both Mph1 and MutSα are required to efficiently suppress COs in the presence of a homeologous substrate. Mph1 acts redundantly with Sgs1 in this respect since mph1Δ sgs1Δ double mutant cells pheno-copy MutSα mutants and completely fail to discriminate homologous and homeologous sequences during HR repair. However, this defect of mph1Δ sgs1Δ cells is not due to an inability to carry out MMR but rather is accompanied by elevated levels of gene conversion (GC) and bi-directional GC tracts specifically in non-crossover products. Models describing how Mph1, MutSα and Sgs1 act in concert to suppress genome rearrangements during ectopic HR repair are discussed.