Microsatellite instability (MSI) is a key biomarker in colorectal cancer (CRC), with crucial diagnostic, prognostic, and predictive implications. Testing for mismatch repair deficiency (MMR-D)/MSI is recommended during screening for Lynch syndrome, an autosomal-dominant hereditary disease that is characterized by germline mutations in the MMR genes and associated with an increased risk for several types of cancer. Additionally, MSI-high (MSI-H) status is associated with a better prognosis in early-stage CRC and a lack of benefit from adjuvant treatment with 5-fluorouracil in stage II disease. More recently, MSI has emerged as a predictor of sensitivity to immunotherapy-based treatments. The groundbreaking success of checkpoint inhibitors in MMR-D metastatic CRC has opened a new therapeutic scenario for patients with these tumors. MSI-H CRC, in both the sporadic and hereditary settings, is characterized by distinctive molecular and clinicopathologic features and represents a unique subset of CRC that is the object of growing interest and fervent research efforts. This article, an overview of the expanding role of MSI in CRC, covers its clinical significance, the available data on molecular profiling, novel perspectives on MSI testing, biomarkers in MSI-H CRC, immunotherapy resistance, and novel immunotherapy strategies.