Sebaceous gland carcinomas (SGCs) are rare malignant skin tumors occurring sporadically or as a phenotypic feature of the Muir-Torre syndrome (MTS). A subset of patients with MTS have a variant of the hereditary nonpolyposis colorectal cancer syndrome caused by mutations in mismatch repair (MMR) genes, which lead to microsatellite instability (MSI). We evaluated the value of MSI and loss of expression of the MMR genes, hMLH-1 and hMSH-2, as a marker to identify and distinguish MTS from sporadic SGC. Using a nationwide pathology report database system, we identified patients with the MTS phenotype. SGCs from 10 MTS patients and the colorectal carcinomas from 3 additional MTS patients were collected. In addition, SGCs from eight patients without a history of visceral neoplasm were collected. MSI was detected in 9 of 13 MTS-associated tumors (69%) versus 0 of 8 sporadic SGCs (P = 0.002). Except for the age of onset of colorectal carcinoma [58 years in the MSI-positive group versus 69.8 years in the MSI-negative group (P = 0.17)], no differences were seen between the MSI-negative and the MSI-positive MTS patients. Loss of expression of hMLH-1 (n = 4) or hMSH-2 (n = 4) was found in MSI-positive patients only. MSI and loss of expression of MMR genes can be used as markers for MTS in patients with SGC. Consequently, MSI and loss of MMR gene expression in a patient presenting with SGC as the initial malignancy have important consequences for the patient and family. There are at least two variants of MTS with different molecular genetic mechanisms because 31% of the patients with the MTS phenotype had no MSI.