Component of the post-replicative DNA mismatch repair system (MMR). Heterodimerizes with MSH2 to form MutS beta, which binds to DNA mismatches thereby initiating DNA repair. MSH3 provides substrate-binding and substrate specificity to the complex. When bound, the MutS beta heterodimer bends the DNA helix and shields approximately 20 base pairs. Acts mainly to repair insertion-deletion loops (IDLs) from 2 to 13 nucleotides in size, but can also repair base-base and single insertion-deletion mismatches that occur during replication. After mismatch binding, forms a ternary complex with either the MutL alpha or MutL beta heterodimer, which is thought to be responsible for directing the downstream MMR events, including strand discrimination, excision, and resynthesis. MutS beta also has a role in regulation of heteroduplex formation during mitotic and meiotic recombination. MutS beta binds to DNA flap structures predicted to form during recombination, and is required for 3' non-homologous tail removal (NHTR). MutS beta-binding alters the DNA conformation of its substrate at the ds/ssDNA junction and may facilitate its recognition and/or cleavage by the downstream nucleotide excision repair (NER) RAD1-RAD10 endonuclease. ATP binding and hydrolysis play a pivotal role in MMR and NHTR (By similarity). Heterodimer consisting of MSH2-MSH3 (MutS beta). Forms a ternary complex with either MutL alpha (MLH1-PMS1) or MutL beta (MLH1-MLH3). MutS beta interacts with proliferating cell nuclear antigen (PCNA/POL30) (By similarity). The PIP box serves as a PCNA(POL30)-recognition and -binding motif. Belongs to the DNA mismatch repair MutS family. MSH3 subfamily.