Some colorectal adenocarcinomas show villous architecture with morphologic similarities to tubulovillous or villous adenomas. We reviewed 420 consecutive colorectal adenocarcinoma resection specimens and found that 95 tumors (23%) showed areas of villous architecture. Thirty-six tumors (8.6%) in 35 patients showed more than 50% villous architecture and were designated villous adenocarcinomas. Only 42% of the villous adenocarcinomas showed severe atypia and only 44% of the available pre-resection biopsies of these tumors were diagnosed as adenocarcinoma. Epithelial islands in desmoplastic stroma (EIDS) may be helpful in the diagnosis of these tumors. EIDS were found in 97% of the resection specimens for villous adenocarcinomas and none of 62 resection specimens for tubulovillous or villous adenomas. The presence of EIDS showed a 67% sensitivity, 100% specificity, and 100% predictive value in the diagnosis of villous adenocarcinoma in a blinded review of villous tumors. On review of the pre-resection biopsies of villous adenocarcinoma without a final diagnosis of adenocarcinoma, 40% showed EIDS. Clinical follow-up of the 35 patients with villous adenocarcinoma showed that only one died of colorectal adenocarcinoma (median follow-up, 46 months). This sole patient dying of colorectal adenocarcinoma showed a synchronous advanced stage of nonvillous adenocarcinoma at the time of diagnosis. Villous adenocarcinoma is a diagnostically challenging subset of colorectal adenocarcinoma, which appears to be associated with a favorable prognosis. Classifying these tumors as a special type of colorectal cancer may facilitate the development of diagnostic adjuncts and optimal treatment protocols.