Fanconi anemia (FA) is a rare recessive disease that reflects the cellular and phenotypic consequences of genetic instability: growth retardation, congenital malformations, bone marrow failure, high risk of neoplasia, and premature aging. At the cellular level, manifestations of genetic instability include chromosomal breakage, cell cycle disturbance, and increased somatic mutation rates. FA cells are exquisitely sensitive towards oxygen and alkylating drugs such as mitomycin C or diepoxybutane, pointing to a function of FA genes in the defense against reactive oxygen species and other DNA damaging agents. FA is caused by biallelic mutations in at least 12 different genes which appear to function in the maintenance of genomic stability. Eight of the FA proteins form a nuclear core complex with a catalytic function involving ubiquitination of the central FANCD2 protein. The posttranslational modification of FANCD2 promotes its accumulation in nuclear foci, together with known DNA maintenance proteins such as BRCA1, BRCA2, and the RAD51 recombinase. Biallelic mutations in BRCA2 cause a severe FA-like phenotype, as do biallelic mutations in FANCD2. In fact, only leaky or hypomorphic mutations in this central group of FA genes appear to be compatible with life birth and survival. The newly discovered FANCJ (= BRIP1) and FANCM (= Hef ) genes correspond to known DNA-maintenance genes (helicase resp. helicase-associated endonuclease for fork-structured DNA). These genes provide the most convincing evidence to date of a direct involvement of FA genes in DNA repair functions associated with the resolution of DNA crosslinks and stalled replication forks. Even though genetic instability caused by mutational inactivation of the FANC genes has detrimental effects for the majority of FA patients, around 20% of patients appear to benefit from genetic instability since genetic instability also increases the chance of somatic reversion of their constitutional mutations. Intragenic crossover, gene conversion, back mutation and compensating mutations in cis have all been observed in revertant, and, consequently, mosaic FA-patients, leading to improved bone marrow function. There probably is no other experiment of nature in our species in which causes and consequences of genetic instability, including the role of reactive oxygen species, can be better documented and explored than in FA.