In eukaryotes, DNA double-strand breaks (DSBs) are repaired by competing HR and non-homologous end-joining (NHEJ) pathways. DSB repair by HR is highly accurate, while NHEJ can result in deletions and insertions. Transcription enhances certain DNA repair pathways and spontaneous homologous recombination (HR). As a means to promote accurate repair in active genes, we thought it possible that the balance between HR and NHEJ would be shifted toward HR in highly transcribed regions. We tested this idea by examining products of DSB repair in integrated neo-direct repeats under conditions of low-level constitutive, or high-level induced transcription regulated by the dexamethasone (Dex)-responsive mouse mammary tumor virus (MMTV) promoter. DSBs were introduced into one copy of neo by expressing I-SceI nuclease, and DSB repair products were isolated and characterized with an efficient, non-selective assay. We found that transcription does not significantly change the relative frequencies of HR and NHEJ, the relative frequencies of sequence capture and gross chromosomal rearrangement, nor the average size of deletions. About one-third of DSB repair products showed large-scale rearrangements, indicating that a single DSB in a mammalian chromosome has significant mutagenic potential.