The DNA mismatch repair (MMR) system recognizes and repairs errors that escaped the proofreading function of DNA polymerases. To study molecular details of the MMR mechanism, in vitro biochemical assays require specific DNA substrates carrying mismatches and strand discrimination signals. Current approaches used to generate MMR substrates are time-consuming and/or not very flexible with respect to sequence context. Here we report an approach to generate small circular DNA containing a mismatch (nanocircles). Our method is based on the nicking of PCR products resulting in single-stranded 3' overhangs, which form DNA circles after annealing and ligation. Depending on the DNA template, one can generate mismatched circles containing a single hemimethylated GATC site (for use with the bacterial system) and/or nicking sites to generate DNA circles nicked in the top or bottom strand (for assays with the bacterial or eukaryotic MMR system). The size of the circles varied (323 to 1100 bp), their sequence was determined by the template DNA, and purification of the circles was achieved by ExoI/ExoIII digestion and/or gel extraction. The quality of the nanocircles was assessed by scanning-force microscopy and their suitability for in vitro repair initiation was examined using recombinant Escherichia coli MMR proteins.