Background: Lynch syndrome (LS) is caused by germline mutations in mismatch repair (MMR) genes (MLH1, MSH2, MSH6, PMS2) or EPCAM, and is associated withincreased cancer risk. The incidence of LS in Iceland is unknown. We investigated the incidence of LS and etiology of MMR deficiency (dMMR) by screening all Icelandic individuals diagnosed with colorectal cancer (CRC) over a decade for dMMR and correlated the results with complete information on LS gene variation and cancer incidence. Methods: Immunohistochemistry (IHC) for MLH1, MSH2, MSH6, and PMS2 was performed on all CRC cases diagnosed from 2000-2009 in Iceland. Cases with MLH1/PMS2 deficient tumors underwent MLH1 hypermethylation (MLH1-hm) testing. Information on MMR gene variation in the Icelandic population was extracted from a genetic database. Germline genotyping was done on peripheral blood mononuclear cells obtained from all patients with dMMR tumors and 78.2% of patients with MMR proficient tumors. All unexplained dMMR cases underwent whole-genome sequencing and tumor ColoSeq to identify somatic MMR mutations. Results: Of 1182 patients (97.8%) with tumor available for MMR IHC, 132 (11.2%) had dMMR. Ninety (7.6%) dMMR cases were MLH1-hm, 21 (1.8%) had LS and 16 (1.4%) double somatic MMR mutations. Overall, LS accounted for 2.3% of all CRCs. Two mutations, MSH6 p.Leu585Pro and PMS2 p.Pro246Cysfs*3, caused 77.8% of LS in CRC patients. Three CRC patients had private mutations in MSH6 and one patient had an interchromosomal translocation in MLH1. Three founder mutations, MSH6 p.Leu585Pro, PMS2 p.Pro246Cysfs*3, and PMS2 p.Met1?had a combined population frequency of 0.442%, affecting 1 in 226 individuals and displayed odds ratios of 10.1, 3.6 and 2.2 for CRC, respectively. Fourteen MMR variants of unknown significance (VUS) in the population were not associated with increased cancer risk. Conclusions: Founder mutations in MSH6 and PMS2 prevail in Iceland. Only one case each of MLH1 and MSH2 mutations occurred. The LS population incidence of 0.442% is the highest ever reported but given the lower cancer penetrance linked to MSH6 and PMS2, only 2.3% of CRC are caused by LS. The MSH6 p.Leu585Pro mutation can be reclassified as a pathogenic mutation and 14 MMR VUS can be reclassified as benign.