Homologous recombination between dispersed repeated genetic elements is an important source of genetic variation. In this review, we discuss chromosome rearrangements that are a consequence of homologous recombination between transposable elements in the yeast Saccharomyces cerevisiae. The review will be divided into five sections: (1) Introduction (mechanisms of homologous recombination involving ectopic repeats), (2) Spontaneous chromosome rearrangements in wild-type yeast cells, (3) Chromosome rearrangements induced by low DNA polymerase, mutagenic agents or mutations in genes affecting genome stability, (4) Recombination between retrotransposons as a mechanism of genome evolution, and (5) Important unanswered questions about homologous recombination between retrotransposons. This review complements several others [S. Liebman, S. Picologlou, Recombination associated with yeast retrotransposons, in: Y. Koltin, M.J. Leibowitz (Eds.), Viruses of Fungi and Simple Eukaryotes, Marcel Dekker Inc., New York, 1988, pp. 63-89; P. Lesage, A.L. Todeschini, Happy together: the life and times of Ty retrotransposons and their hosts, Cytogenet. Genome Res. 110 (2005) 70-90; D.J. Garfinkel, Genome evolution mediated by Ty elements in Saccharomyces, Cytogenet. Genome Res. 110 (2005) 63-69] that discuss genomic rearrangements involving Ty elements.