Damage to DNA by reactive oxygen species may be a significant source of endogenous mutagenesis in aerobic organisms. Using a selective assay for microsatellite instability in E. coli, we have asked whether endogenous oxidative mutagenesis can contribute to genetic instability. Instability of repetitive sequences, both in intronic sequences and within coding regions, is a hallmark of genetic instability in human cancers. We demonstrate that exposure of E. coli to low levels of hydrogen peroxide increases the frequency of expansions and deletions within dinucleotide repetitive sequences. Sequencing of the repetitive sequences and flanking non-repetitive regions in mutant clones demonstrated the high specificity for alterations with the repeats. All of the 183 mutants sequenced displayed frameshift alterations within the microsatellite repeats, and no base substitutions or frameshift mutations occurred within the flanking non-repetitive sequences. We hypothesize that endogenous oxidative damage to DNA can increase the frequency of strand slippage intermediates occurring during DNA replication or repair synthesis, and contribute to genomic instability.