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Targeted next-generation sequencing is becoming increasingly common as a clinical diagnostic and prognostic test for patient- and tumor-specific genetic profiles as well as to optimally select targeted therapies. Here, we describe a custom-developed, next-generation sequencing test for detecting single-nucleotide variants (SNVs) and short insertions and deletions (indels) in 93 genes related to gastrointestinal cancer from routine formalin-fixed, paraffin-embedded clinical specimens. We implemented a validation strategy, based on the College of American Pathologists requirements, using reference DNA mixtures from cell lines with known genetic variants, which model a broad range of allele frequencies. Test sensitivity achieved >99% for both SNVs and indels, with allele frequencies >10%, with high specificity (97.4% for SNVs and 93.6% for indels). We further confirmed test accuracies using primary formalin-fixed, paraffin-embedded colorectal cancer specimens characterized by alternative and conventional clinical diagnostic technologies. Robust performance was observed on the formalin-fixed, paraffin-embedded specimens: sensitivity was 97.2% and specificity was 99.2%. We also observed high intrarun and inter-run reproducibility, as well as a low cross-contamination rate. Overall assessment using cell line samples and formalin-fixed, paraffin-embedded samples showed that our custom next-generation sequencing assay has consistent detection sensitivity down to 10% variant frequency.