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Three-methyl cytosine (3meC) are toxic DNA lesions, blocking base pairing. Bacteria and humans express members of the AlkB enzymes family, which directly remove 3meC. However, other organisms, including budding yeast, lack this class of enzymes. It remains an unanswered evolutionary question as to how yeast repairs 3meC, particularly in single-stranded DNA. The yeast Shu complex, a conserved homologous recombination factor, aids in preventing replication-associated mutagenesis from DNA base damaging agents such as methyl methanesulfonate (MMS). We found that MMS-treated Shu complex-deficient cells exhibit a genome-wide increase in A:T and G:C substitutions mutations. The G:C substitutions displayed transcriptional and replicational asymmetries consistent with mutations resulting from 3meC. Ectopic expression of a human AlkB homolog in Shu-deficient yeast rescues MMS-induced growth defects and increased mutagenesis. Thus, our work identifies a novel homologous recombination-based mechanism mediated by the Shu complex for coping with alkylation adducts.