Transforming growth factor-beta (TGF-beta) is a potent inhibitor of epithelial cell growth. Human colon cancer cell lines with high rates of microsatellite instability were found to harbor mutations in the type II TGF-beta receptor (RII) gene. Eight such examples, due to three different mutations, were identified. The mutations were clustered within small repeated sequences in the RII gene, were accompanied by the absence of cell surface RII receptors, and were usually associated with small amounts of RII transcript. RII mutation, by inducing the escape of cells from TGF-beta-mediated growth control, links DNA repair defects with a specific pathway of tumor progression.