Some 10% of familial adenomatous polyposis (FAP) and 80% of attenuated polyposis (AFAP) cases remain molecularly unexplained. We scrutinized such cases by exome-wide and targeted methods to search for novel susceptibility genes. Exome sequencing was conducted on 40 unexplained (mainly sporadic) cases with FAP or AFAP from Finland. The DNA mismatch repair (MMR) gene MLH3 (MutL Homolog 3) was pinpointed and prompted a subsequent screen of ~1000 Swedish patients referred to clinical panel sequencing for colon tumor susceptibility. Three homozygous carriers of a truncating variant in MLH3, c.3563C>G, p.Ser1188Ter, were identified among the index cases from the Finnish series. An additional biallelic carrier of the same variant was present in the Swedish series. All four patients shared a 0.8-Mb core haplotype around MLH3, suggesting a founder variant. Colorectal polyps from variant carriers showed no instability at mono-, di-, tri-, or tetranucleotide repeats, in agreement with previous findings of a minor role of MLH3 in MMR. Multiple loci were affected by loss of heterozygosity, suggesting chromosomal instability. Our results show that a biallelic nonsense variant of MLH3 underlies a novel syndrome with susceptibility to classical or attenuated adenomatous polyposis and possibly extracolonic tumors, including breast cancer.