Temozolomide (TMZ) remains the cornerstone of chemotherapeutic agent for glioblastoma (GBM), yet intrinsic and acquired resistance severely limits its clinical benefit. While O6-methylguanine-DNA methyltransferase (MGMT)–mediated repair of TMZ-induced O6-methylguanine (O6-meG) lesions has been extensively studied, the DNA mismatch repair (MMR) pathway is increasingly recognized as a key determinant of TMZ cytotoxicity. Canonical MMR, mediated by MutSα (MSH2–MSH6) and MutLα (MLH1–PMS2) complexes, recognizes O6-meG: thymine mispairs generated during replication and initiates futile repair cycles that culminate in replication stress, replication fork collapse, and apoptotic signaling; intact canonical MMR is, therefore, required for TMZ-induced cell death. Disruption of canonical MMR, frequently via acquired MSH6 mutations, confers TMZ tolerance and drives hypermutated recurrent GBM. Beyond mismatch correction, MMR proteins perform non-canonical functions in DNA damage signaling, replication stress responses, transcriptional regulation, chromatin dynamics, and immune modulation. These activities may shift the outcome from cytotoxic futile repair toward replication stress adaptation, Translesion synthesis (TLS)-mediated lesion tolerance, immune remodeling, and therapeutic resistance. Notably, partial attenuation or functional diversion of MMR may decouple lesion recognition from cytotoxic signaling, enabling TLS-mediated lesion tolerance without complete loss of MMR activity. This review integrates current insights into canonical and non-canonical MMR functions in GBM, defines their distinct contributions to TMZ sensitivity and resistance, and highlights therapeutic opportunities to exploit MMR-associated dependencies, including synthetic lethal strategies and immunotherapeutic vulnerabilities linked to MMR deficiency-driven hypermutation.