Malarial parasites exhibit extensive genomic plasticity, which induces the antigen diversification and the development of antimalarial drug resistance. Only a few studies have examined the genome maintenance mechanisms of parasites. The study aimed at elucidating the impact of a mutation in a DNA mismatch repair gene on genome stability by maintaining the mutant and wild-type parasites through serial cultures for approximately 400 days and analysing the subsequent spontaneous mutations. A P513T mutant of the DNA mismatch repair protein PfMSH2-1 from 3D7 was created. The mutation did not influence the base substitution rate but significantly increased the insertion/deletion (indel) mutation rate in short tandem repeats (STRs) and minisatellite loci. STR mutability was affected by allele size, genomic category and certain repeat motifs. In the mutants, significant telomere healing and homologous recombination at chromosomal ends caused extensive gene loss and generation of chimeric genes, resulting in large-scale chromosomal alteration. Additionally, the mutant showed increased tolerance to N-methyl-N'-nitro-N-nitrosoguanidine, suggesting that PfMSH2-1 was involved in recognizing DNA methylation damage. This work provides valuable insights into the role of PfMSH2-1 in genome stability and demonstrates that the genomic destabilization caused by its dysfunction may lead to antigen diversification.