Genomic stability is maintained by the surveillance and repair of DNA damage. Here, we describe a mechanism whereby repair of extrachromosomal DNA double-strand breaks (DSBs) in human cells can be accompanied by capture of genomic DNA fragments. The availability of the human genome sequence enabled us to characterize these inserts in cells from a normal individual and from a patient with ataxia telangiectasia (AT), deficient for the damage response kinase ATM and prone to genomic instability. We find AT cells exhibit insertions of human chromosomal DNA fragments in excess of 17 kb during DSB repair, whereas we detected no such genomic inserts in normal cells. However, the presence of simian virus 40 (SV40), used to transform these cell lines, resulted in capture of genomic DNA associated with sites of viral integration in both cell types. The genomic instability at sites of SV40 integration was exported to other sites of DNA damage, and acquisition of the viral origin of replication resulted in gene amplification through autonomous replication of the plasmid harbouring the repaired extrachromosomal DSB. Should this same phenomenon apply to the repair of chromosomal DSBs, genome rearrangements made possible via this DSB insertional repair pose risks to genomic integrity, and may contribute to tumorigenic progression.