The human DNA mismatch repair (MMR) process is crucial to maintain the integrity of the genome and requires many different proteins which interact perfectly and coordinated. Germline mutations in MMR genes are responsible for the development of the hereditary form of colorectal cancer called Lynch syndrome. Various mutations mainly in two MMR proteins, MLH1 and MSH2, have been identified so far, whereas 55% are detected within MLH1, the essential component of the heterodimer MutLα (MLH1 and PMS2). Most of those MLH1 variants are pathogenic but the relevance of missense mutations often remains unclear. Many different recombinant systems are applied to filter out disease-associated proteins whereby fluorescent tagged proteins are frequently used. However, dye labeling might have deleterious effects on MutLα's functionality. Therefore, we analyzed the consequences of N- and C-terminal fluorescent labeling on expression level, cellular localization and MMR activity of MutLα. Besides significant influence of GFP- or Red-fusion on protein expression we detected incorrect shuttling of single expressed C-terminal GFP-tagged PMS2 into the nucleus and found that C-terminal dye labeling impaired MMR function of MutLα. In contrast, N-terminal tagged MutLαs retained correct functionality and can be recommended both for the analysis of cellular localization and MMR efficiency.