The 18q-syndrome is representative of a group of terminal deficiency or macrodeletion syndromes characterized by mental retardation and congenital malformations. To gain insight into the mechanism of chromosomal loss and stabilization in these disorders, we cloned a putative terminal deletion breakpoint from an 18q-syndrome patient. The 18q21.3 breakpoint occurred between two nearly identical serine protease inhibitor (serpin) genes, SCCA1 and SCCA2. Although cytogenetic studies suggested that this chromosomal aberration was formed by a simple terminal deletion, DNA sequence analysis, pulsed-field gel electrophoresis and fluorescence in situ hybridization showed that the breakpoint was contiguous with a 35 bp filler sequence followed by a satellite III DNA-containing telomeric fragment of 475-1000 kb. This type of satellite III DNA sequence was not detected on the normal chromosome 18, but was highly homologous with types of satellite III DNA sequences normally located on the short arms (p11) of the acrocentric chromosomes and other heterochromatic regions. This DNA sequence analysis suggested that the terminal deficiency in this 18q-syndrome patient arose via illegitimate (non-homologous) recombination. Moreover, these data raise the possibility that a subset of chromosomal aberrations appearing cytogenetically and molecularly as simple terminal truncations or deletions are caused by small (<1000 kb) cryptic rearrangements.