Complex insertions and deletions (indels) are formed by simultaneously deleting and inserting DNA fragments of different sizes at a common genomic location. Here we present a systematic analysis of somatic complex indels in the coding sequences of samples from over 8,000 cancer cases using Pindel-C. We discovered 285 complex indels in cancer-associated genes (such as PIK3R1, TP53, ARID1A, GATA3 and KMT2D) in approximately 3.5% of cases analyzed; nearly all instances of complex indels were overlooked (81.1%) or misannotated (17.6%) in previous reports of 2,199 samples. In-frame complex indels are enriched in PIK3R1 and EGFR, whereas frameshifts are prevalent in VHL, GATA3, TP53, ARID1A, PTEN and ATRX. Furthermore, complex indels display strong tissue specificity (such as VHL in kidney cancer samples and GATA3 in breast cancer samples). Finally, structural analyses support findings of previously missed, but potentially druggable, mutations in the EGFR, MET and KIT oncogenes. This study indicates the critical importance of improving complex indel discovery and interpretation in medical research.