Trinucleotide repeat (TNR) expansions are the underlying cause of more than 40 neurodegenerative and neuromuscular diseases, including myotonic dystrophy and Huntington's disease. Although genetic evidence points to errors in DNA replication and/or repair as the cause of these diseases, clear molecular mechanisms have not been described. Here, we focused on the role of the mismatch repair complex Msh2-Msh3 in promoting TNR expansions. We demonstrate that Msh2-Msh3 promotes CTG and CAG repeat expansions in vivo in Saccharomyces cerevisiae. Furthermore, we provide biochemical evidence that Msh2-Msh3 directly interferes with normal Okazaki fragment processing by flap endonuclease1 (Rad27) and DNA ligase I (Cdc9) in the presence of TNR sequences, thereby producing small, incremental expansion events. We believe that this is the first mechanistic evidence showing the interplay of replication and repair proteins in the expansion of sequences during lagging-strand DNA replication.