The mechanism by which germline mutations of DNA mismatch repair genes cause susceptibility to tumour formation is not yet understood. Studies in vitro indicate that heterozygosity for these mutations, unlike homozygosity, does not affect mismatch repair. Surprisingly, no loss of heterozygosity at the predisposing loci has so far been described in hereditary nonpolyposis colorectal cancers. Here, we show that loss of heterozygosity (LOH) of markers within or adjacent to the MLH1 gene on chromosome 3p occurs nonrandomly in tumours from members of families in which the disease phenotype cosegregates with MLH1. In every informative case, the loss affects the wild type allele. These results suggest that DNA mismatch repair genes resemble tumour suppressor genes in that two hits are required to cause a phenotypic effect.