A subset of sporadic gastric cancers (GC) exhibits microsatellite instability (MSI). To define the precise role of MSI in GC, a total of 100 patients with sporadic GC were classified into three groups, i.e., high-frequency MSI (MSI-H), low-frequency MSI (MSI-L), and microsatellite stable (MSS), based on 10 microsatellite markers. Mutational analyses of TGFβ€RII, IGFIIR, BAX, MSH3, MSH6, E2F4, MSH2, MLH1, and TP53 genes, and methylation and protein expression of MLH1 and MSH2 were performed and correlated. Twenty-seven percent of GC showed MSI at least in one locus and could be further graded as MSI-H (14%) and MSI-L (13%). No clinicopathologic difference was noted between GC with MSI-L and MSS. Compared with GC with MSI-L or MSS, GC with MSI-H had a significantly higher frequency of antral location, intestinal subtype, H. pylori seropositivity, but a lower incidence of lymph node metastasis, and displayed a higher frequency of frameshift mutations of TGFβ€RII, IGFIIR, BAX, MSH3, and E2F4 genes but a lower incidence of TP53 mutations. Furthermore, hypermethylation of the MLH1 promoter was responsible for the loss of protein function in 13 of 14 MSI-H tumors. It was concluded that a specific phenotype and a distinct profile of genetic alterations exist in MSI-H GC. We speculate that epigenetic inactivation of MLH1 by methylation plays a crucial role in initiating such a pathway of carcinogenesis. In contrast, GCs with MSS and MSI-L exhibit clinicopathologic features that are distinct from MSI-H tumors and have a higher frequency of TP53 mutations, suggesting that they may evolve through an entirely different pathway.