Fanconi anemia (FA) is a rare genetic disorder characterized by bone marrow failure and an increased risk for leukemia and cancer. Fifteen proteins thought to function in the repair of DNA interstrand crosslinks (ICLs) comprise what is known as the FA-BRCA pathway. Activation of this pathway leads to the monoubiquitylation and chromatin localization of FANCD2 and FANCI. It has previously been shown that FANCJ interacts with the mismatch repair (MMR) complex MutLα. Here we show that FANCD2 interacts with the MMR proteins MSH2 and MLH1. FANCD2 monoubiquitylation, foci formation and chromatin loading are greatly diminished in MSH2-deficient cells. Human or mouse cells lacking MSH2 or MLH1 display increased sensitivity and radial formation in response to treatment with DNA crosslinking agents. Studies in human cell lines and Drosophila mutants suggest an epistatic relationship between FANCD2, MSH2 and MLH1 with regard to ICL repair. Surprisingly, the interaction between MSH2 and MLH1 is compromised in multiple FA cell lines, and FA cell lines exhibit deficient MMR. These results suggest a significant role for MMR proteins in the activation of the FA pathway and repair of ICLs. In addition, we provide the first evidence for a defect in MMR in FA cell lines.