Ataxia telangiectasia-mutated and Rad3-related (ATR) protein kinase, a master regulator of DNA-damage response, is activated by RPA-coated single-stranded DNA (ssDNA) generated at stalled replication forks or DNA double-strand breaks (DSBs). Here, we identify the mismatch-binding protein MutSβ, a heterodimer of MSH2 and MSH3, as a key player in this process. MSH2 and MSH3 form a complex with ATR and its regulatory partner ATRIP, and their depletion compromises the formation of ATRIP foci and phosphorylation of ATR substrates in cells responding to replication-associated DSBs. Purified MutSβ binds to hairpin loop structures that persist in RPA-ssDNA complexes and promotes ATRIP recruitment. Mutations in the mismatch-binding domain of MSH3 abolish the binding of MutSβ to DNA hairpin loops and its ability to promote ATR activation by ssDNA. These results suggest that hairpin loops might form in ssDNA generated at sites of DNA damage and trigger ATR activation in a process mediated by MutSβ.