Familial gastrointestinal stromal tumor (GIST) is a rare autosomal dominant genetic disorder. We report the second family to date with a germline point mutation in exon 17 of the KIT gene that leads to substitution of aspartic acid at position 820 with tyrosine (D820Y). One or more GISTs was documented in three generations of this kindred, and there was associated hyperplasia of the interstitial cells of Cajal (ICC). One affected family member complained of dysphagia and another suffered small intestinal diverticulosis with perforation, which may represent additional consequences of ICC hyperplasia. Diffuse and nodular ICC hyperplasia associated with the latter family member's small intestinal diverticulosis is illustrated, providing supportive functional and morphologic evidence for the ICC being the cell of origin of GISTs. Skin hyperpigmentation was not observed. Analysis of a 17-cm malignant GIST in the index patient revealed that it was hemi/homozygous for the germline D820Y mutation, indicating loss of the remaining wild-type KIT allele with tumor progression. Two smaller lesions from this patient were heterozygous for the mutation. This phenomenon has been observed in up to 8% of sporadic malignant GISTs but has not been documented in familial disease.