Sensitive detection of microsatellite instability (MSI) in tissue or liquid biopsies using next generation sequencing (NGS) has growing prognostic and predictive applications in cancer. However, the complexities of NGS make it cumbersome as compared to established multiplex-PCR detection of MSI. We present a new approach to detect MSI using inter-Alu-PCR followed by targeted NGS, that combines the practical advantages of multiplexed-PCR with the breadth of information provided by NGS. Inter-Alu-PCR employs poly-adenine repeats of variable length present in every Alu element and provides a massively-parallel, rapid approach to capture poly-A-rich genomic fractions within short 80-150bp amplicons generated from adjacent Alu-sequences. A custom-made software analysis tool, MSI-tracer, enables Alu-associated MSI detection from tissue biopsies or MSI-tracing at low-levels in circulating-DNA. MSI-associated indels at somatic-indel frequencies of 0.05-1.5% can be detected depending on the availability of matching normal tissue and the extent of instability. Due to the high Alu copy-number in human genomes, a single inter-Alu-PCR retrieves enough information for identification of MSI-associated-indels from ∼100 pg circulating-DNA, reducing current limits by ∼2-orders of magnitude and equivalent to circulating-DNA obtained from finger-sticks. The combined practical and informational advantages of inter-Alu-PCR make it a powerful tool for identifying tissue-MSI-status or tracing MSI-associated-indels in liquid biopsies.