The DNA helicase Rrm3 promotes replication fork progression through >1000 discrete genomic regions and represses the cDNA-mediated mobility of the Ty1 retrotransposon. We explored the connection between DNA replication and Ty1 retromobility by investigating the basis of increased retromobility in an rrm3 mutant. Even though Ty1 cDNA levels are increased in the absence of RRM3, neither the level nor target-site specificity of cDNA integration was altered. Instead, cDNA was incorporated into the genome by a Rad52-dependent mechanism that did not involve gene conversion of genomic Ty1 sequences. In rrm3 isolates, incorporated cDNA was often present in tandem arrays. Multimeric cDNA arrays probably arise during chromosomal break repair, since their appearance was strongly correlated with the formation of gross chromosomal rearrangements. Moreover, Ty1 multimers were invariantly located on rearranged chromosomes, when present. Overexpression of a cellular RNase H, which degrades RNA in an RNA:DNA hybrid, completely suppressed the increase in Ty1 multimer formation in an rrm3 mutant. We propose that RNA:DNA hybrid regions within nascent retrotransposition events block replication in an rrm3 mutant, leading to chromosome breaks within Ty1 sequences. Multiple extragenomic Ty1 cDNA molecules are then used as donors in recombinational repair of the break before it is healed.