Recombinogenic engineering methodology, also known as recombineering, utilizes homologous recombination to create targeted changes in cellular DNA with great specificity and flexibility. In Escherichia coli, the Red recombination system from bacteriophage lambda has been used successfully to modify both plasmid and chromosomal DNA in a highly efficient manner, using either a linear double-stranded DNA fragment or a synthetic single-stranded oligonucleotide (SSO). The current model for Red/SSO-mediated recombination involves the SSO first annealing to a transient, single-stranded region of DNA before being incorporated into the chromosome or plasmid target. It has been observed previously, in both eukaryotes and prokaryotes, that mutations in the two strands of the DNA double helix are 'corrected' by complementary SSOs with differing efficiencies. Here we investigate further the factors that influence the strand bias as well as the overall efficiency of Red/SSO-mediated recombination in E.coli. We show that the direction of DNA replication and the nature of the SSO-encoded mismatch are the main factors dictating the recombinational strand bias. However, the influence that the SSO-encoded mismatch exerts upon the recombinational strand bias is abolished in E.coli strains that are defective in mismatch repair (MMR). This reflects the fact that different base-base mispairs are corrected by the mutS/H/L-dependent MMR pathway with differing efficiencies. Furthermore, our data indicate that transcription has negligible influence on the strand bias. These results demonstrate for the first time that the interplay between DNA replication and MMR has a major effect on the efficiency and strand bias of Red/SSO-mediated recombination in E.coli.