Defects in DNA mismatch repair (MMR) are the molecular basis of certain cancers, including hematological malignancies. The defects are often caused by mutations in coding regions of MMR genes or promoter methylation of the genes. However, in many cases, despite that a hypermutable phenotype is detected in a patient, no mutations/hypermethylations of MMR genes can be detected. We report here a novel mechanism that a mutation in the MLH1 3'-untranslated region (3'-UTR) leads to MMR deficiency. A relapsed leukemia patient displayed microsatellite instability, but no genetic and epigenetic alterations in key MMR genes were identifiable. Instead, a 3-nucleotide (TTC) deletion in the MLH1 3'-UTR was found in the patient's blood sample. The mutant MLH1 3'-UTR was found to significantly reduce the expressions of both a firefly luciferase reporter gene and an ectopic MLH1 gene in model cell lines. Consistent with these observations, a significant reduction in the steady-state level of MLH1 mRNA was observed in white blood cells of the patient. These findings suggest that the mutant MLH1 3'-UTR can cause a severely reduced/defective MMR activity conferring leukemia relapse, likely by down-regulating MLH1 expression at the mRNA level. Although the exact mechanism by which the mutant 3'-UTR down-regulates the MLH1 mRNA is not known, our findings provide a novel marker for cancers with MMR defects.