We recently proposed a DNA replication-based mechanism of fork stalling and template switching (FoSTeS) to explain the complex genomic rearrangements associated with a dysmyelinating central nervous system disorder in humans. The FoSTeS mechanism has been further generalized and molecular mechanistic details have been provided in the microhomology-mediated break-induced replication (MMBIR) model that may underlie many structural variations in genomes from all domains of life. Here we provide evidence that human genomic rearrangements ranging in size from several megabases to a few hundred base pairs can be generated by FoSTeS/MMBIR. Furthermore, we show that FoSTeS/MMBIR-mediated rearrangements can occur mitotically and can result in duplication or triplication of individual genes or even rearrangements of single exons. The FoSTeS/MMBIR mechanism can explain both the gene duplication-divergence hypothesis and exon shuffling, suggesting an important role in both genome and single-gene evolution.