MSH2 is a central component of the mismatch repair pathway that targets mismatches arising during DNA replication, homologous recombination (HR) and in response to genotoxic stresses. Here, we describe the function of MSH2 in the moss Physcomitrella patens, as deciphered by the analysis of loss of function mutants. Ppmsh2 mutants display pleiotropic growth and developmental defects, which reflect genomic instability. Based on loss of function of the APT gene, we estimated this mutator phenotype to be at least 130 times higher in the mutants than in wild type. We also found that MSH2 is involved in some but not all the moss responses to genotoxic stresses we tested. Indeed, the Ppmsh2 mutants were more tolerant to cisplatin and show higher sensitivity to UV-B radiations. PpMSH2 gene involvement in HR was studied by assessing gene targeting (GT) efficiency with homologous and homeologous sequences. GT efficiency with homologous sequences was slightly decreased in the Ppmsh2 mutant compared with wild type. Strikingly GT efficiency with homeologous sequences decreased proportionally to sequence divergence in the wild type whereas it remained unaffected in the mutants. Those results demonstrate the role of PpMSH2 in the maintenance of genome integrity and in homologous and homeologous recombination.