Meiotic pairing between parental chromosomes (homologs) is required for formation of haploid gametes. Homolog pairing depends on recombination initiation via programmed double-strand breaks (DSBs). Although DSBs appear prior to pairing, the homolog, rather than the sister chromatid, is used as repair partner for crossing over. Here, we show that Mph1, the budding yeast ortholog of Fanconi anemia helicase FANCM, prevents precocious DSB strand exchange between sister chromatids before homologs have completed pairing. By dissociating precocious DNA displacement loops (D-loops) between sister chromatids, Mph1 ensures high levels of crossovers and non-crossovers between homologs. Later-occurring recombination events are protected from Mph1-mediated dissociation by synapsis protein Zip1. Increased intersister repair in absence of Mph1 triggers a shift among remaining interhomolog events from non-crossovers to crossover-specific strand exchange, explaining Mph1's apparent anti-crossover function. Our findings identify temporal coordination between DSB strand exchange and homolog pairing as a critical determinant for recombination outcome.