The DNA damage response (DDR) pathway and its core component tumor suppressor p53 block cell cycle progression after genotoxic stress and represent an intrinsic barrier preventing cancer development. The serine/threonine phosphatase PPM1D/Wip1 inactivates p53 and promotes termination of the DDR pathway. Wip1 has been suggested to act as an oncogene in a subset of tumors that retain wild-type p53. In this paper, we have identified novel gain-of-function mutations in exon 6 of PPM1D that result in expression of C-terminally truncated Wip1. Remarkably, mutations in PPM1D are present not only in the tumors but also in other tissues of breast and colorectal cancer patients, indicating that they arise early in development or affect the germline. We show that mutations in PPM1D affect the DDR pathway and propose that they could predispose to cancer.