Sporadic human mismatch repair (MMR)-deficient colorectal cancers account for approximately 12.5% of all cases of colorectal cancer. MMR-deficient colorectal cancers are classically characterized by right-sided location, multifocality, mucinous histology, and lymphocytic infiltration. However, tumors in germ-line MMR-deficient mouse models lack these histopathologic features. Mice lacking the heterotrimeric G protein alpha subunit Gialpha2 develop chronic colitis and multifocal, right-sided cancers with mucinous histopathology, similar to human MMR-deficient colorectal cancer. Young Gialpha2-/- colonic epithelium has normal MMR expression but selectively loses MLH1 and consequently PMS2 expression following inflammation. Gialpha2-/- cancers have microsatellite instability. Mlh1 is epigenetically silenced not by promoter hypermethylation but by decreased histone acetylation. Chronically inflamed Gialpha2-/- colonic mucosa contains patchy hypoxia, with increased crypt expression of the hypoxia markers DEC-1 and BNIP3. Chromatin immunoprecipitation identified increased binding of the transcriptional repressor DEC-1 to the proximal Mlh1 promoter in hypoxic YAMC cells and colitic Gialpha2-/- crypts. Treating Gialpha2-/- mice with the histone deacetylase inhibitor suberoylanilide hydroxamic acid significantly decreased colitis activity and rescued MLH1 expression in crypt epithelial cells, which was associated with increased acetyl histone H3 levels and decreased DEC-1 binding at the proximal Mlh1 promoter, consistent with a histone deacetylase-dependent mechanism. These data link chronic hypoxic inflammation, epigenetic MMR protein down-regulation, development of MMR-deficient colorectal cancer, and the firstmouse model of somatically acquired MMR-deficient colorectal cancer.