We have developed a gene transfer approach to facilitate the identification and isolation of chromosomal regions which are prone to high-frequency gene amplification. Such regions are identified by assaying for transformants which show high-frequency resistance to PALA and/or methotrexate by amplification of a vector containing the genes which encode the enzyme targets of these antiproliferative agents. We identified 2 of 47 transformants which displayed high-frequency amplification of the transfected genes, and in this report we describe the analysis of one of them (L46). Molecular analysis of the integration site in transformant L46 revealed that the donated genes were at the center of an inverted duplication which spanned more than 70 kilobase pairs and consisted largely of host DNA. The data suggest that integration of the transfected sequences generates a submicroscopic molecule containing the inverted duplication and at least 750 kilobases of additional sequences. The donated sequences and the host sequences were readily amplified and lost in exponentially growing cultures in the absence of drug selection, which suggests that the extrachromosomal elements are acentric. In contrast to the instability of this region following gene insertion, the preinsertion site was maintained at single copy level under growth conditions which produced copy number heterogeneity in L46. The implications of our results for mechanisms of genetic instability and mammalian gene amplification are discussed.