Abstract Re-sequencing of target genes is a highly effective approach for identifying mutations in cancers. Mutations, including indels (insertions, deletions, and the combination of the two), play important roles in carcinogenesis. Combining genomic DNA capture using high-density oligonucleotide microarrays (NimbleGen, Inc.) with next-generation high-throughput sequencing, we identified approximately 1600 indels for colorectal cancers in the Chinese population. Among them, 5 indels were localized to exonic regions of genes, including the TFDP1 (transcription factor Dp-1) gene. TFDP1 is an important transcription factor that coordinates with E2F proteins, thereby promoting transcription of E2F target genes and regulating the cell cycle and differentiation. We report here the identification of a recurrent frame-shift indel mutation (named indel84) in the TFDP1 gene in colorectal cancers by next-generation sequencing. We found in a validation set that TFDP1 indel84 is present in 70% of colorectal cancer (CRC) tissues. Wild-type TFDP1 encodes a protein of 410 amino acids with a potential DNA binding site at its N-terminal followed by several functional protein domains. The TFDP1 indel cDNA would generate an alternative TFDP1 protein missing the first 120 amino acids and potentially affecting the DNA binding domain. We further demonstrated that the TFDP1 indel84 mutation generated a gain-of-function phenotype by increasing cell proliferation, migration, and invasion of CRC cells. Our study identified a key molecular event for CRC that might have great diagnostic and therapeutic potentials.