Progression to advanced-stage cervical carcinomas is characterized by a recurrent pattern of chromosomal rearrangements. Structural chromosome rearrangements are generated through the fusion of broken chromosome ends. These chromosome breaks may be induced by mutagenic agents such as ionizing radiation, or chromosome ends may be exposed through extensive telomere shortening. The human papilloma virus oncogene 16E6 induces telomerase activity in human keratinocytes, a model system for cervical tumor formation. The present study explores the relationship between 16E6 expression, telomerase activity, and chromosomal instability. We show that the frequency of anaphase bridges is dependent on the level of telomerase activity in 16E6/E7-expressing clones, and is the result of telomere shortening. High frequencies of anaphase bridges, associated with low telomerase activity, correlate with increased chromosome instability. Anaphase bridge formation is also associated with the presence of micronuclei, which are shown to contain unstable chromosomes frequently involved in rearrangements. As anaphase bridges are observed in both high and low telomerase 16E6/E7 clones, but not in hTERT-expressing control clones, expression of 16E6 in these immortalized clones is not sufficient to stabilize shortened telomeres completely. We suggest a model in which HPV-induced tumorigenesis may be dependent on persistent bridge-breakage-fusion cycles that allow for continued genomic rearrangements.