We describe genetic and physical characterization of rearrangements of chromosome III which result in changes of cell type in S. cerevisiae. Two types of rearrangements were obtained as rare events which caused a change at the locus controlling cell type, MAT, associated with a recessive lethal mutation, in one case from MATalpha to MATa-lethal, and in the other case from MATa to MATalpha-lethal. The MATa-lethal mutation is a deletion on the right arm of chromosome III, which we demonstrate extends to (or near) HMalpha. We suggest this deletion removes MATalpha and activates cryptic MATa information stored in HMalpha as proposed in the cassette model of mating type interconversion. The MATalpha-lethal mutation is the result of the formation of a circular chromosome III, which we interpret to remove MATa and activate the cryptic MATalpha information stored at HMa. Strains carrying the MATalpha-lethal chromosome contain a circular chromosome of length 62.6 plus or minus 5.7 mum, which is absent in related strains. This chromosome was confirmed to be chromosome III by hybridization of specific yeast DNA fragments to supercoiled DNA obtained from MATalpha-lethal strains. The isolation of a large circular derivative of chromosome III allows correlation of genetic and physical distance based on large distances-1 centimorgan corresponds to approximately 2700 base pairs.