Fundic gland polyps (FGPs) are the most common gastric polyps in patients with familial adenomatous polyposis (FAP). FGPs have traditionally been regarded as nonneoplastic, possibly hamartomatous lesions, but the pathogenesis of FGPs in both FAP and sporadic patients remains unclear. FGPs in FAP can show foveolar dysplasia, and rarely invasive gastric adenocarcinoma has been reported in patients with FAP and fundic gland polyposis. Using direct gene sequencing and allelic loss assays at 5q, we analyzed somatic adenomatous polyposis coli (APC) gene alterations in 41 FAP-associated FGPs (20 with foveolar dysplasia, six indefinite for dysplasia, and 15 nondysplastic) and 13 sporadic FGPs. The foveolar epithelium and dilated fundic glands of the polyps were separately microdissected and analyzed in 25 of 41 FAP-associated FGPs and 13 of 13 sporadic FGPs. Somatic APC gene alterations were identified frequently (21 of 41 cases, 51%) in FAP-associated FGPs. Both the foveolar epithelium and the dilated fundic gland epithelium comprising the FGPs were shown to carry the same somatic APC gene alteration in 24 (96%) of 25 cases. Furthermore, there was no difference in the frequency of somatic APC gene alterations between FGPs with foveolar dysplasia (10 of 20, 50%), indefinite for dysplasia (four of six, 67%), and nondysplastic (seven of 15, 47%) in FAP patients (P: = 0.697). In contrast, FGPs from non-FAP patients showed infrequent (one of 13, 8%) APC gene alterations (P: = 0.008). These results show that FGPs in FAP patients are pathogenetically distinct from sporadic FGPs. Somatic, second-hit APC gene alterations, which precede morphological dysplasia in many FAP-associated FGPs, indicate that FGPs arising in the setting of FAP are neoplastic lesions.