Recombination and microsatellite mutation in humans contribute to disorders including cancer and trinucleotide repeat (TNR) disease. TNR expansions in wild-type yeast may arise by flap ligation during lagging-strand replication. Here we show that overexpression of DNA ligase I (CDC9) increases the rates of TNR expansion, of TNR contraction, and of mitotic recombination. Surprisingly, this effect is observed with catalytically inactive forms of Cdc9p protein, but only if they possess a functional PCNA-binding site. Furthermore, in vitro analysis indicates that the interaction of PCNA with Cdc9p and Rad27p (Fen1) is mutually exclusive. Together our genetic and biochemical analysis suggests that, although DNA ligase I seals DNA nicks during replication, repair, and recombination, higher than normal levels can yield genetic instability by disrupting the normal interplay of PCNA with other proteins such as Fen1.