Whole-exome sequencing (Exome-seq) has been successfully applied in several recent studies. We here sequenced the exomes of 15 pancreatic tumor cell lines and their matched normal samples. We captured 162,073 exons of 16,954 genes and sequenced the targeted regions to a mean coverage of 56-fold. This study identified a total of 1517 somatic mutations and validated 934 mutations by transcriptome sequencing. We detected recurrent mutations in 56 genes. Among them, 41 have not been described. The mutation rates varied widely among cell lines. The diversity of the mutation rates was significantly correlated with the distinct MLH1 copy-number status. Exome-seq revealed intensive genomic instability in a cell line with MLH1 homozygous deletion, indicated by a dramatically elevated rate of somatic substitutions, small insertions/deletions (indels), as well as indels in microsatellites. Notably, we found that MLH1 expression was decreased by nearly half in cell lines with an allelic loss of MLH1. While these cell lines were negative in conventional microsatellite instability assay, they showed a 10.5-fold increase in the rate of somatic indels, e.g., truncating indels in TP53 and TGFBR2, indicating MLH1 haploinsufficiency in the correction of DNA indel errors. We further analyzed the exomes of 15 renal cell carcinomas and confirmed MLH1 haploinsufficiency. We observed a much higher rate of indel mutations in the affected cases and identified recurrent truncating indels in several cancer genes such as VHL, PBRM1, and JARID1C. Together, our data suggest that MLH1 hemizygous deletion, through increasing the rate of indel mutations, could drive the development and progression of sporadic cancers.