Sister chromatid exchanges, which may reflect chromosome repair in response to certain types of DNA damage, provide a means of investigating the increased chromosome fragility characteristic of Fanconi's anemia. By a recently developed technique using 33258 Hoechst and 5-bromodeoxyuridine, it was observed that the baseline frequency of sister chromatid exchanges in phytohemagglutinin-stimulated lymphocytes from four males with Fanconi's anemia differed little from that of normal lymphocytes. However, addition of the bifunctional alkylating agent mitomycin C (0.01 or 0.03 mug/ml) to the Fanconi's anemia cells during culture induces less than half of the increase in exchanges found in identically treated normal lymphocytes. This reduced increment in exchanges in accompanied by a partial suppression of mitosis and a marked increase in chromatid breaks and rearrangements. Many of these events occur at sites of incomplete chromatid interchange. The increase in sister chromatid exchanges induced in Fanconi's anemia lymphocytes by the monofunctional alkylating agent ethylmethane sulfonate (0.25 mg/ml) was slightly less than that in normal cells. Lymphocytes from two sets of parents of the patients with Fanconi's anemia exhibited a normal response to alkylating agents, while dermal fibroblasts from two different patients with Fanconi's anemia reacted to mitomycin C with an increase in chromatid breaks, but a nearly normal increment of sister chromatid exchanges. The results suggest that chromosomal breaks and rearrangements in Fanconi's anemia lymphocytes may result from a defect in a form of repair of DNA damage.