Routine screening of tumors for DNA mismatch repair (MMR) deficiency (dMMR) in colorectal (CRC), endometrial (EC) and sebaceous skin (SST) tumors leads to a significant proportion of unresolved cases classified as suspected Lynch syndrome (SLS). SLS cases (n = 135) were recruited from Family Cancer Clinics across Australia and New Zealand. Targeted panel sequencing was performed on tumor (n = 137; 80×CRCs, 33×ECs and 24xSSTs) and matched blood-derived DNA to assess for microsatellite instability status, tumor mutation burden, COSMIC tumor mutational signatures and to identify germline and somatic MMR gene variants. MMR immunohistochemistry (IHC) and MLH1 promoter methylation were repeated. In total, 86.9% of the 137 SLS tumors could be resolved into established subtypes. For 22.6% of these resolved SLS cases, primary MLH1 epimutations (2.2%) as well as previously undetected germline MMR pathogenic variants (1.5%), tumor MLH1 methylation (13.1%) or false positive dMMR IHC (5.8%) results were identified. Double somatic MMR gene mutations were the major cause of dMMR identified across each tumor type (73.9% of resolved cases, 64.2% overall, 70% of CRC, 45.5% of ECs and 70.8% of SSTs). The unresolved SLS tumors (13.1%) comprised tumors with only a single somatic (7.3%) or no somatic (5.8%) MMR gene mutations. A tumor-focused testing approach reclassified 86.9% of SLS into Lynch syndrome, sporadic dMMR or MMR-proficient cases. These findings support the incorporation of tumor sequencing and alternate MLH1 methylation assays into clinical diagnostics to reduce the number of SLS patients and provide more appropriate surveillance and screening recommendations.