In order to determine the effects of mismatch repair (MMR) deficiencies in sporadic colorectal carcinomas, 45 such cancers were examined using a sensitive method called crypt isolation technique. Loss of heterozygosity (LOH) in the MSH2 or MLH1 gene was more frequently observed in replication error (RER) (+) carcinomas than in RER (-) carcinomas, which implied that loss of one normal allele could partly affect repair capacity. MSH2 gene defects at both alleles were observed in two carcinomas, which showed severe repair deficiencies. Interestingly, unlike the situation observed in the p53 gene, the MSH2 and MLH1 genes did not show complete LOH. Novel crypt isolation-based subpopulation (CISP) analysis demonstrated that at least two distinct carcinoma subpopulations existed in most carcinomas that showed incomplete LOH; one with and one without LOH. In one carcinoma that had germline mutation and somatic incomplete LOH of the MSH2 gene, the mutator phenotype was only observed in populations affected in both alleles. Thus, the MSH2 gene appears to possess the two hits mechanism of tumor suppressor genes. However, unlike the tumor suppressor genes, MMR gene defects lead to a unique mode of colorectal tumorigenesis characterized by intratumoral heterogeneity.