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The hereditary mixed polyposis syndrome (HMPS) was first described about 50 years ago in a large Ashkenazi Jewish family from St Mark’s Hospital, London. The family showed apparent autosomal dominant inheritance of multiple types of colorectal polyp, with colorectal carcinoma in a high proportion of individuals. In the last 15 years, we have mapped the HMPS gene to chromosome 15q13.3 and identified an ancestral haplotype common to all the known HMPS families. Here, we have used genetic mapping, copy number analysis, exclusion of mutations by high-throughput sequencing, gene expression analysis and functional assays to show that HMPS is caused by a large duplication spanning the 3′ end of the SCG5 gene and a region upstream of the GREM1 locus. This mutation has no effect on SCG5 expression, but is associated with greatly increased, allele-specific GREM1 expression. Whilst GREM1 is expressed in intestinal sub-epithelial myofibroblasts in controls, HMPS patients predominantly express GREM1 in the epithelium of the large bowel. The HMPS duplication contains predicted transcriptional enhancer elements; we have shown that some of these interact with the GREM1 promoter and are capable of driving gene expression in vitro. Increased GREM1 expression is predicted to lead to reduced bone morphogenetic protein pathway activity, a mechanism that also underlies tumorigenesis in juvenile polyposis of the large bowel. The pathogenic mechanism in HMPS is extremely unusual in Mendelian cancer syndromes and highlights ectopic gene expression as a mechanism of tumorigenesis.