DNA strand exchange is of great importance in vivo for genetic recombination and DNA repair. The detailed mechanism of strand exchange is not understood in full detail despite extensive studies. Simplistic model systems in which molecular parameters can be varied independently are therefore of interest to study. We chose the surface of a positively charged liposome as a scaffold, which we recently demonstrated to be able to catalyze the exchange of fully complementary DNA oligonucleotides. We here study how single base pair mismatches affect the rate of strand exchange on the liposome surface. Interestingly, the rate of the exchange does not simply follow the stability of the duplex in solution, as determined by melting temperatures, but also depends sensitively on the position of the mismatch. For duplexes with similar melting temperatures, the exchange is much faster for a mismatch close to the end than for a mismatch in the middle of the sequence. Our results suggest that the single strands are stabilized by the liposome surface; therefore, the duplex is fraying more and the DNA opens up in a zipperlike fashion on the surface, increasing the probability of strand exchange. We also show that the competition between greater stability (higher T. in solution) and higher concentration is important for the final composition of the duplex when a large excess of single strands is added to a complementary double-stranded DNA. Finally, the similar exchange rate constants for fully base-paired duplexes on the liposome surface when adding fully matched single strands or single strands with a mismatched base indicate that the rate is governed largely by separation of the initial duplex and not by the formation of the product duplex.