For primary colorectal cancers (CRCs), tumor stage has been the best predictor of survival after resection and the key determinant of patient management. However, considerable stage-independent variability in clinical outcome is observed that is likely due to molecular heterogeneity. This is particularly important in early stage CRCs where patients can be cured by surgery alone and only a proportion derives benefit from adjuvant chemotherapy. Thus, the identification of molecular prognostic markers to supplement conventional pathologic staging systems has the potential to guide patient management and influence outcomes. CRC is a heterogeneous disease with molecular phenotypes reflecting distinct forms of genetic instability. The chromosomal instability pathway (CIN) is the most common phenotype, accounting for 85% of all sporadic CRCs. Alternatively, the microsatellite instability (MSI) phenotype represents ~15% of all CRCs and is caused by deficient DNA mismatch repair (MMR) as a consequence of germline mutations in MMR genes or, more commonly, epigenetic silencing of the MLH1 gene with frequent mutations in the BRAF oncogene. MSI tumors have distinct phenotypic features and are consistently associated with a better stage-adjusted prognosis compared with microsatellite stable (MSS) tumors. Among non-metastatic CRCs, the difference in prognosis between MSI and MSS tumors is larger for stage II than stage III patients. On the other hand, the predictive impact of MMR status for adjuvant chemotherapy remains a contentious issue in that most studies demonstrate a lack of benefit for 5-fluorouracil (5-FU)-based adjuvant chemotherapy in stage II MSI-H CRCs, whereas it remains unclear in MSI-H stage III tumors. Here, we describe the molecular aspects of the MMR system and discuss the implications of MMR-deficient/MSI-H status in the clinical management of patients with early stage CRC.