Microsatellite instability (MSI) is associated with defective DNA mismatch repair in various human malignancies. Using a unique fluorescent technique, we have observed two distinct modes of dinucleotide microsatellite alterations in human colorectal cancer. Type A alterations are defined as length changes of < or =6 bp. Type B changes are more drastic and involve modifications of > or =8 bp. We show here that defective mismatch repair is necessary and sufficient for Type A changes. These changes were observed in cell lines and in tumours from mismatch repair gene-knockout mice. No Type B instability was seen in these cells or tumours. In a panel of human colorectal tumours, both Type A MSI and Type B instability were observed. Both types of MSI were associated with hMSH2 or hMLH1 mismatch repair gene alterations. Intriguingly, p53 mutations, which are generally regarded as uncommon in human tumours of the MSI+ phenotype, were frequently associated with Type A instability, whereas none was found in tumours with Type B instability, reflecting the prevailing viewpoint. Inspection of published data reveals that the microsatellite instability that has been observed in various malignancies, including those associated with Hereditary Non-Polyposis Colorectal Cancer (HNPCC), is predominantly Type B. Our findings indicate that Type B instability is not a simple reflection of a repair defect. We suggest that there are at least two qualitatively distinct modes of dinucleotide MSI in human colorectal cancer, and that different molecular mechanisms may underlie these modes of MSI. The relationship between MSI and defective mismatch repair may be more complex than hitherto suspected.