Hypermethylation of the hMLH1 mismatch repair gene promoter has been revealed to lead to microsatellite instability (MSI). Previously, we demonstrated a high prevalence of MSI in differentiated-type gastric tumors showing distinct features of gastric foveolar epithelium (foveolar type). To clarify the significance of hMLH1 promoter hypermethylation in the development of this tumor type, we studied promoter methylation status and expression of hMLH1 in foveolar-type tumors and their surrounding non-neoplastic mucosae, as well as in tumors with other cellular phenotypes. The results were compared to MSI status. After phenotypical analyses using mucin histochemistry and immunohistochemistry, 41 differentiated-type tumors with distinct cellular phenotypes were classified into three categories: foveolar type, intestinal type (tumors with the distinct cellular phenotype of the intestine), and combined type (tumors with both foveolar and intestinal phenotypes). Methylation-specific polymerase chain reaction (MSP) was performed to determine the methylation status of hMLH1 promoter. hMLH1 protein expression was immunohistochemically examined. MSI was detected in 57% of the foveolar type, 8% of the intestinal type, and 67% of the combined-type tumors. Hypermethylation of hMLH1 promoter was found in 74% of the foveolar type, 33% of the intestinal type, and 83% of the combined-type tumors. Of 18 MSI-positive tumors, all but one were hypermethylated. Methylation status of hMLH1 promoter correlated well with protein expression in foveolar-type tumors. Moreover, hypermethylation was also detected frequently (71%) in the non-neoplastic surrounding mucosa of the hypermethylated tumors. Hypermethylation of hMLH1 promoter is an initial, vital event in the development of foveolar-type tumors of the stomach.