Chromosome 3q alterations occur frequently in many types of tumours. In a genetic screen for loci present in rhabdomyosarcomas, we identified an isochromosome 3q [i(3q)], which inhibits muscle differentiation when transferred into myoblasts. The i(3q) inhibits MyoD function, resulting in a non-differentiating phenotype. Furthermore, the i(3q) induces a 'cut' phenotype, abnormal centrosome amplification, aneuploidy and loss of G1 arrest following gamma-irradiation. Testing candidate genes within this region reveals that forced expression of ataxia-telangiectasia and rad3-related (ATR) results in a phenocopy of the i(3q). Thus, genetic alteration of ATR leads to loss of differentiation as well as cell-cycle abnormalities.