A long-standing hypothesis on tumorigenesis is that cell division failure, generating genetically unstable tetraploid cells, facilitates the development of aneuploid malignancies. Here we test this idea by transiently blocking cytokinesis in p53-null (p53-/-) mouse mammary epithelial cells (MMECs), enabling the isolation of diploid and tetraploid cultures. The tetraploid cells had an increase in the frequency of whole-chromosome mis-segregation and chromosomal rearrangements. Only the tetraploid cells were transformed in vitro after exposure to a carcinogen. Furthermore, in the absence of carcinogen, only the tetraploid cells gave rise to malignant mammary epithelial cancers when transplanted subcutaneously into nude mice. These tumours all contained numerous non-reciprocal translocations and an 8-30-fold amplification of a chromosomal region containing a cluster of matrix metalloproteinase (MMP) genes. MMP overexpression is linked to mammary tumours in humans and animal models. Thus, tetraploidy enhances the frequency of chromosomal alterations and promotes tumour development in p53-/- MMECs.