||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 the MutL alpha heterodimer, which is thought to be responsible for directing the downstream MMR events, including strand discrimination, excision, and resynthesis. ATP binding and hydrolysis play a pivotal role in mismatch repair functions (By similarity).