The structural analysis of aberrant chromosomes is important for our understanding of the molecular mechanisms underlying chromosomal rearrangements. We have identified a number of diploid Saccharomyces cerevisiae clones that have undergone loss of heterozygosity (LOH) leading to functional inactivation of the hemizygous URA3 marker placed on the right arm of chromosome III. Aberrant-sized chromosomes derived from chromosome III were detected in approximately 8% of LOH clones. Here, we have analyzed the structure of the aberrant chromosomes in 45 LOH clones with a PCR-based method that determines the ploidy of a series of loci on chromosome III. The alterations included various deletions and amplifications. Sequencing of the junctions revealed that all the breakpoints had been made within repeat sequences in the yeast genome, namely, MAT-HMR, which resulted in intrachromosomal deletion, and retrotransposon Ty1 elements, which were involved in various translocations. Although the translocations involved different breakpoints on different chromosomes, all breakpoints were exclusively within Ty1 elements. Some of the resulting Ty1 elements left at the breakpoints had a complex construction that indicated the involvement of other Ty1 elements not present at the parental breakpoints. These indicate that Ty1 elements are crucially involved in the generation of chromosomal rearrangements in diploid yeast cells.