Special mechanisms of mutation are induced in microbes under growth-limiting stress causing genetic instability, including occasional adaptive mutations that may speed evolution. Both the mutation mechanisms and their control by stress have remained elusive. We provide evidence that the molecular basis for stress-induced mutagenesis in an E. coli model is error-prone DNA double-strand break repair (DSBR). I-SceI-endonuclease-induced DSBs strongly activate stress-induced mutations near the DSB, but not globally. The same proteins are required as for cells without induced DSBs: DSBR proteins, DinB-error-prone polymerase, and the RpoS starvation-stress-response regulator. Mutation is promoted by homology between cut and uncut DNA molecules, supporting a homology-mediated DSBR mechanism. DSBs also promote gene amplification. Finally, DSBs activate mutation only during stationary phase/starvation but will during exponential growth if RpoS is expressed. Our findings reveal an RpoS-controlled switch from high-fidelity to mutagenic DSBR under stress. This limits genetic instability both in time and to localized genome regions, potentially important evolutionary strategies.