Genomic analysis of archival tissues fixed in formalin is of fundamental importance in biomedical research, and numerous studies have used such material. Although the possibility of polymerase chain reaction (PCR)-introduced artifacts is known, the use of direct sequencing has been thought to overcome such problems. Here we report the results from a controlled study, performed in parallel on frozen and formalin-fixed material, where a high frequency of nonreproducible sequence alterations was detected with the use of formalin-fixed tissues. Defined numbers of well-characterized tumor cells were amplified and analyzed by direct DNA sequencing. No nonreproducible sequence alterations were found in frozen tissues. In formalin-fixed material up to one mutation artifact per 500 bases was recorded. The chance of such artificial mutations in formalin-fixed material was inversely correlated with the number of cells used in the PCR-the fewer cells, the more artifacts. A total of 28 artificial mutations were recorded, of which 27 were C-T or G-A transitions. Through confirmational sequencing of independent amplification products artifacts can be distinguished from true mutations. However, because this problem was not acknowledged earlier, the presence of artifacts may have profoundly influenced previously reported mutations in formalin-fixed material, including those inserted into mutation databases.