Here, we report the investigation of microsatellite instability (MSI) in human cells with a newly developed reporter system based on fluorescence. We composed a vector into which microsatellites of different lengths and nucleotide composition can be introduced between a functional copy of the fluorescent protein mCherry and an out-of-frame copy of EGFP; in vivo frameshifting will lead to EGFP expression, which can be quantified by fluorescence activated cell sorting (FACS). Via targeted recombineering, single copy reporters were introduced in HEK293 and MCF-7 cells. We found predominantly -1 and +1 base pair frameshifts, the levels of which are kept in tune by mismatch repair. We show that tract length and composition greatly influences MSI. In contrast, a tracts' potential to form a G-quadruplex structure, its strand orientation or its transcriptional status is not affecting MSI. We further validated the functionality of the reporter system for screening microsatellite mutagenicity of compounds and for identifying modifiers of MSI: using a retroviral miRNA expression library, we identified miR-21, which targets MSH2, as a miRNA that induces MSI when overexpressed. Our data also provide proof of principle for the strategy of combining fluorescent reporters with next-generation sequencing technology to identify genetic factors in specific pathways.