Most sporadic gastric cancer with the microsatellite instability (MSI) phenotype is linked with hypermethylation (HM) of hMLH1. However, a part of gastric cancer with hMLH1 HM does not show MSI, suggesting a region-specific effect of hMLH1 promoter methylation on developing MSI. To test this possibility, we measured the methylation level in 3 distinct areas of hMLH1 promoter and compared them with MSI in 129 sporadic gastric cancer patients. Three areas of hMLH1 promoter, from distal toward proximal, were designated as hMLH1-A, hMLH1-B, and hMLH1-C, respectively. The methylation level was measured by fluorescence-based real-time methylation specific PCR. MSI status was tested using a panel of 5 microsatellite markers (BAT25, BAT26, D2S123, D5S346, and D17S250). Gastric cancers with no HM in hMLH1-A (n=105, 81.4%) also showed no HM in 2 other regions of hMLH1 promoter. On the other hand, the cancers with HM in hMLH1-A (n=24, 18.6%) showed various levels of methylation in 2 other regions. In most cases, the methylation value was the highest in hMLH1-A and the lowest in hMLH1-C. We found the MSI phenotype in 12 cancers (13%) of 92 tested cases and these cancers were all associated with HM in the region of hMLH1-C. A third of hypermethylated cancers in the hMLH1-A region did not show the MSI phenotype. The survival of the patients with HM in hMLH1-C was significantly better than that of patients without HM (P<0.05). These results suggest that HM in the proximal region of hMLH1 promoter, hMLH1-C in this study, plays a critical role in the progression of gastric cancer with MSI. The complete association between HM in hMLH1-C and MSI phenotype with gastric cancer provides an alternative diagnostic tool for detecting a favorable prognostic subgroup with MSI by using simple methylation analysis.