Hereditary non-polyposis colorectal cancer (HNPCC) is a dominantly inherited cancer predisposition syndrome that is caused by germline mutations in mismatch repair genes. By screening the core promoters of hMSH2, hMLH1, and hMSH6 in 37 Chinese suspected HNPCC families, a novel germline mutation c.-78_-79delGT was found in the hMSH2 promoter. Its pathogenic effects were supported by the following findings: (a) it co-segregated with HNPCC-related cancers and was not present in the 220 control subjects, (b) tumors harboring the mutation lacked the expression of hMSH2 and showed high microsatellite instability, (c) it significantly decreased the promoter activity, and (d) it abolished the binding ability of the transcription factor E1A-F. Loss of heterozygosity (LOH) was found in three of the tumors studied. Intriguingly, in the tumors from patients II:1 and III:1, LOH occurred in the wild-type allele and agreed well with the traditional 'two-hit' model. In contrast, in the tumor from patient III:3, LOH occurred in the mutant allele. A pathogenic somatic mutation (c.2210+1G>A) was also found in this tumor; therefore, we proposed that the 'second hit' was inactivated by somatic mutation, and the mutant allele was lost during tumor progression; this provided evidence for the new hypothesis for the dual role of LOH.