Molecular biomarkers of cancer are needed to assist histologic staging in the selection of treatment, outcome risk stratification, and patient prognosis. This is particularly important for patients with early-stage disease. We show that shedding of the extracellular domain of activated leukocyte cell adhesion molecule (ALCAM) is prognostic for outcome in patients with colorectal cancer (CRC). Previous reports on the prognostic value of ALCAM expression in CRC have been contradictory and inconclusive. This study clarifies the prognostic value of ALCAM by visualizing ectodomain shedding using a dual stain that detects both the extracellular and the intracellular domains in formalin-fixed tissue. Using this novel assay, 105 patients with primary CRCs and 12 normal mucosa samples were evaluated. ALCAM shedding, defined as detection of the intracellular domain in the absence of the corresponding extracellular domain, was significantly elevated in patients with CRC and correlated with reduced survival. Conversely, retention of intact ALCAM was associated with improved survival, thereby confirming that ALCAM shedding is associated with poor patient outcome. Importantly, analysis of patients with stage II CRC showed that disease-specific survival is significantly reduced for patients with elevated ALCAM shedding (P = 0.01; HR, 3.0), suggesting that ALCAM shedding can identify patients with early-stage disease at risk of rapid progression.