DNA mismatch repair (MMR), an evolutionarily conserved repair pathway shared by prokaryotic and eukaryotic species alike, influences molecular evolution by detecting and correcting mismatches, thereby protecting genetic fidelity, reducing the mutational load, and preventing lethality. Herein we conduct the first genome-wide evaluation of the alterations to the mutation rate and spectrum under impaired activity of the MutSα homolog, msh-2, in Caenorhabditis elegans male–female fog-2(lf) lines. We performed mutation accumulation (MA) under RNAi-induced knockdown of msh-2 for up to 50 generations, followed by next-generation sequencing of 19 MA lines and the ancestral control. msh-2 impairment in the male–female background substantially increased the frequency of nuclear base substitutions (∼23×) and small indels (∼328×) relative to wildtype hermaphrodites. However, we observed no increase in the mutation rates of mtDNA, and copy-number changes of single-copy genes. There was a marked increase in copy-number variation of rDNA genes under MMR impairment. In C. elegans, msh-2 repairs transitions more efficiently than transversions and increases the AT mutational bias relative to wildtype. The local sequence context, including sequence complexity, G + C-content, and flanking bases influenced the mutation rate. The X chromosome exhibited lower substitution and higher indel rates than autosomes, which can either result from sex-specific mutation rates or a nonrandom distribution of mutable sites between chromosomes. Provided the observed difference in mutational pattern is mostly due to MMR impairment, our results indicate that the specificity of MMR varies between taxa, and is more efficient in detecting and repairing small indels in eukaryotes relative to prokaryotes.