Mismatch repair (MMR) deficiency is a major mechanism of colorectal tumorigenesis that is observed in 10-15% of sporadic colorectal cancers and those associated with the hereditary nonpolyposis colorectal cancer (HNPCC) syndrome. MMR deficiency leads to the accumulation of mutations mainly at short repetitive sequences termed microsatellites, constituting the high level microsatellite instability (MSI-H) phenotype. In recent years, several genes have been described that harbor microsatellites in their coding region (coding microsatellites, cMS) and are frequently affected by mutations in MMR-deficient cancers. However, evidence for a functional role of most of the known cMS-containing genes is missing, and further analyses are needed for a better understanding of MSI tumorigenesis. Here, we examined in detail alterations of the absent in melanoma 2 (AIM2) gene that shows a high frequency of cMS frameshift mutations in MSI-H colorectal, gastric, and endometrial tumors. AIM2 belongs to the HIN-200 family of interferon (IFN)-inducible proteins, its role in colon carcinogenesis, however, is unknown. Sequencing of the entire coding region of AIM2 revealed a high frequency of frameshift and missense mutations in primary MSI-H colon cancers (9/20) and cell lines (9/15). Biallelic AIM2 alterations were detected in 8 MSI-H colon tumors and cell lines. In addition, AIM2 promoter hypermethylation conferred insensitivity to IFN-gamma-induced AIM2 expression of three MSI-H colon cancer cell lines. These results demonstrate that inactivation of AIM2 by genetic and epigenetic mechanisms is frequent in MMR-deficient colorectal cancers, thus suggesting that AIM2 is a mutational target relevant for the progression of MSI-H colorectal cancers.