The receptor tyrosine kinase EPHB2 has recently been shown to be a direct transcriptional target of TCF/beta-catenin. Premalignant lesions of the colon express high levels of EPHB2 but the expression of this kinase is reduced or lost in most colorectal carcinomas. In addition, inactivation of EPHB2 has been shown to accelerate tumorigenesis initiated by APC mutation in the colon and rectum. In this study, we investigated the molecular mechanisms responsible for the inactivation of EPHB2 in colorectal tumors. We show here the presence of mutations in repetitive sequences in exon 17 of EPHB2 in 6 of 29 adenomas with microsatellite instability (MSI), and 101 of 246 MSI carcinomas (21% and 41%, respectively). Moreover, we found EPHB2 promoter hypermethylation in 54 of the 101 colorectal tumors studied (53%). Importantly, EPHB2 expression was restored after treatment of EPHB2-methylated colon cancer cells with the DNA methyltransferase inhibitor 5-aza-2'-deoxycytidine. In conclusion, in this study, we elucidate the molecular mechanisms of inactivation of EPHB2 and show for the first time the high incidence of frameshift mutations in MSI colorectal tumors and aberrant methylation of the regulatory sequences of this important tumor suppressor gene.