To better understand physiological function of P-glycoprotein (P-gp), encoded by MDR1 gene, and its role in cancer, we analyzed tumor and corresponding normal tissue from 400 patients with previously non treated colorectal cancer for germline and somatic alterations in MDR1 gene and compared the results to histopathological data and microsatellite instability status of tumors. We have identified naturally occurring mutations in the MDRI gene associated with colorectal cancers with high microsatellite instability (MSI-H) suggesting that tumor cells with MDR1 mutations are selected for during development of MSI-H cancers and that MDR1 plays an important role in tumor initiation and progression in at least a proportion of MSI-H cancers. We found that in all MSI-H tumors with MDR1 mutations, both, the coding and promoter regions were mutated. These results and results from others suggest that alterations in MDR1 promoter are important for P-gp function and that screening for naturally occurring mutations in the promoter region of MDR1 is important in some of the human cancers. We have identified also 12 different germline polymorphisms and at least two of them were significantly associated with increased lymphoid infiltration in tumors suggesting physiological function for P-gp in immune response in addition to protection from xenobotics.