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Sebaceous carcinomas are rare cutaneous appendageal tumors that may occur sporadically or in association with an internal malignancy in Muir-Torre syndrome. In Muir-Torre syndrome microsatellite instability can often be demonstrated in tumor DNA as a result of an inherited mutation in one of several known mismatch repair genes; however, the role of microsatellite instability in sporadic sebaceous carcinomas has not been previously studied. In this report we describe the clinicopathologic characteristics of a series of unselected sebaceous carcinomas and examine them for the presence of microsatellite instability. Of 10 consecutive tumors identified over a 10 y period, only one was from a patient known to have Muir-Torre syndrome. Of the nine presumed sporadic cases, five were from four renal transplant recipients and four from otherwise healthy individuals. Microsatellite instability was demonstrable in three cases: in the Muir-Torre syndrome-associated tumor and in two tumors from transplant patients. Microsatellite instability was subsequently also found in a sebaceous carcinoma from a further transplant patient prospectively sought from another institution. The presence of microsatellite instability in post-transplant sebaceous carcinomas was associated with loss of expression of the mismatch repair protein hMSH2. In summary, sebaceous gland carcinomas, while characteristic of Muir-Torre syndrome, are commonly found outside this context. Among presumed sporadic cases, our data suggest they may be over-represented in immunosuppressed renal transplant recipients. The presence of microsatellite instability in transplant-associated lesions, together with loss of hMSH2 expression suggests that immunosuppression might unmask a previously silent Muir-Torre syndrome phenotype in some cases. Alternatively, there is experimental evidence to suggest that immunosuppressive drugs, most plausibly azathioprine, could select for the emergence of a mutator phenotype and thus predispose to the development of sebaceous carcinomas. The role of mismatch repair defects in other post-transplant skin malignancies remains to be established.