Temozolomide (TMZ), a DNA methylating agent, is the primary chemotherapeutic drug used in glioblastoma treatment. TMZ induces mostly N-alkylation adducts (N7-methylguanine and N3-methyladenine) and some O6-methylguanine (O6mG). Current models propose that during DNA replication, thymine is incorporated across from O6mG, promoting a futile cycle of mismatch repair (MMR) that leads to DNA double strand breaks (DSBs). To revisit the mechanism of O6mG processing, we reacted plasmid DNA with N-Methyl-N-nitrosourea (MNU), a temozolomide mimic, and incubated it in Xenopus egg-derived extracts. We show that in this system, mismatch repair (MMR) proteins are enriched on MNU-treated DNA and we observe robust, MMR-dependent, repair synthesis. Our evidence also suggests that MMR, initiated at O6mG:C sites, is strongly stimulated in cis by repair processing of other lesions, such as N-alkylation adducts. Importantly, MNU-treated plasmids display DSBs in extracts, the frequency of which increased linearly with the square of alkylation dose. We suggest that DSBs result from two independent repair processes, one involving MMR at O6mG:C sites and the other involving BER acting at a nearby N-alkylation adducts. We propose a new, replication-independent mechanism of action of TMZ, that operates in addition to the well-studied cell cycle dependent mode of action.