Chromosome instability plays an important role in cancer by promoting the alterations in the genome required for tumor cell progression. The loss of telomeres that protect the ends of chromosomes and prevent chromosome fusion has been proposed as one mechanism for chromosome instability in cancer cells, however, there is little direct evidence to support this hypothesis. To investigate the relationship between spontaneous telomere loss and chromosome instability in human cancer cells, clones of the EJ-30 tumor cell line were isolated in which a herpes simplex virus thymidine kinase (HSV-tk) gene was integrated immediately adjacent to a telomere. Selection for HSV-tk-deficient cells with ganciclovir demonstrated a high rate of loss of the end these "marked" chromosomes (10-4 events/cell per generation). DNA sequence and cytogenetic analysis suggests that the loss of function of the HSV-tk gene most often involves telomere loss, sister chromatid fusion, and prolonged periods of chromosome instability. In some HSV-tk-deficient cells, telomeric repeat sequences were added on to the end of the truncated HSV-tk gene at a new location, whereas in others, no telomere was detected on the end of the marked chromosome. These results suggest that spontaneous telomere loss is a mechanism for chromosome instability in human cancer cells.