We obtained strains of yeast with large segments of 2 mu plasmid DNA integrated at several chromosomal locations by selecting genetically for recombination between a chromosomal sequence carried on a 2 mu-circle-containing hybrid plasmid and a homologous sequence on the chromosome. In all diploids examined, the presence of 2 mu circle sequences causes a marked instability of the chromosome into which the 2 mu DNA is inserted. Although in some cases the loss of genetic markers is due to physical loss of the entire chromosome, in most cases the loss of markers appears to be due to a mitotic homozygotization of markers: the allelic information from the homologous chromosome replaces the information distal to the integrated 2 mu DNA. The instability caused by integrated 2 mu DNA sequences requires the activity of the specialized site-specific recombination system encoded by the 2 mu plasmid. We propose that the presence of integrated 2 mu DNA allows efficient integration of additional copies of the intact 2 mu plasmid by the action of the plasmid-coded special recombination system. Unequal sister-strand exchanges within the inverted repetition would result in the formation of dicentric chromosomes whose breakage during mitosis might begin a cycle analogous to the breakage-fusion-bridge cycle described many years ago in maize.