We describe a 54-year-old man with a pedicled tumour on the neck. The surgical specimen revealed a sebaceous carcinoma. He belonged to a cancer-prone family susceptible to gastrointestinal cancer. Systemic evaluation for latent malignancies revealed early-stage colonic adenocarcinoma. These findings were compatible with Muir-Torre syndrome (MTS). Microsatellite instability was detected in the sebaceous carcinoma, suggesting a DNA mismatch repair gene mutation. Moreover, duplication of exon 7 generated a nonsense codon at codon 427 of the MSH2 gene causing truncation of MSH2 protein. Immunohistochemical analysis showed diminished MSH2 protein levels in the sebaceous carcinoma and colonic adenocarcinoma. To date, there have been no reports showing duplication of exon 7 of the MSH2 gene in MTS or hereditary nonpolyposis colorectal cancer kindreds. Furthermore, the present case indicates that the dermatologist plays an important role in the diagnosis of MTS and evaluation for latent malignancies.