Chromosome instability (CIN) is found in 85% of colorectal cancers. Defects in mitotic processes are implicated in high CIN and may be critical events in colorectal tumorigenesis. Shugoshin-1 (SGO1) aids in the maintenance of chromosome cohesion and prevents premature chromosome separation and CIN. In addition, integrity of the centrosome may be compromised due to the deficiency of Cohesin and Sgo1 through the disengagement of centrioles. We report here the generation and characterization of SGO1-mutant mice and show that haploinsufficiency of SGO1 leads to enhanced colonic tumorigenesis. Complete disruption of SGO1 results in embryonic lethality, whereas SGO1+/- mice are viable and fertile. Haploinsufficiency of SGO1 results in genomic instability manifested as missegregation of chromosomes and formation of extra centrosomal foci in both murine embryonic fibroblasts and adult bone marrow cells. Enhanced CIN observed in SGO1-deficient mice resulted in an increase in formation of aberrant crypt foci (ACF) and accelerated development of tumors after exposure to azoxymethane (AOM), a colon carcinogen. Together, these results suggest that haploinsufficiency of SGO1 causes enhanced CIN, colonic preneoplastic lesions and tumorigenesis in mice. SGO1 is essential for the suppression of CIN and tumor formation.