Final answer:
Mismatch repair differentiates between the new and old DNA strands by recognizing the methylation pattern. Proteins like MutS, MutL, and MutH target the unmethylated (new) strand to correct mismatches with exonuclease, DNA polymerase III, and ligase.
Step-by-step explanation:
During mismatch repair, the cell utilizes a system to recognize which strand is the newly synthesized strand and hence identify the incorrect nucleotide. In bacteria such as E. coli, this is achieved by using the methylation status of the DNA strands. The parental DNA strand is methylated, and methylation of the new daughter strand occurs with a time delay after replication. Mismatch repair proteins, such as MutS, MutL, and MutH, detect the hemimethylated state of the DNA where only the parental strand is methylated. Specifically, MutH cleaves only the unmethylated strand (the new strand). An exonuclease then removes a section of the unmethylated strand, including the mismatched bases. The resulting gap is filled with the correct nucleotides by DNA polymerase III and sealed by ligase, thus ensuring the fidelity of the DNA replication process.