Reciprocal translocations are common in cancer cells, but their creation is poorly understood. We have developed an assay system in Saccharomyces cerevisiae to study reciprocal translocation formation in the absence of homology. We induce two specific double-strand breaks (DSBs) simultaneously on separate chromosomes with HO endonuclease and analyze the subsequent chromosomal rearrangements among surviving cells. Under these conditions, reciprocal translocations via nonhomologous end joining (NHEJ) occur at frequencies of approximately 2-7 x 10(-5)/cell exposed to the DSBs. Yku80p is a component of the cell's NHEJ machinery. In its absence, reciprocal translocations still occur, but the junctions are associated with deletions and extended overlapping sequences. After induction of a single DSB, translocations and inversions are recovered in wild-type and rad52 strains. In these rearrangements, a nonrandom assortment of sites have fused to the DSB, and their junctions show typical signs of NHEJ. The sites tend to be between open reading frames or within Ty1 LTRs. In some cases the translocation partner is formed by a break at a cryptic HO recognition site. Our results demonstrate that NHEJ-mediated reciprocal translocations can form in S. cerevisiae as a consequence of DSB repair.