Neurofibromatosis type 1 patients with a submicroscopic deletion spanning the NF1 tumor suppressor gene are remarkable for an early age at onset of cutaneous neurofibromas, suggesting the deletion of an additional locus that potentiates neurofibromagenesis. Construction of a 3.5 Mb BAC/PAC/YAC contig at chromosome 17q11.2 and analysis of somatic cell hybrids from microdeletion patients showed that 14 of 17 cases had deletions of 1.5 Mb in length. The deletions encompassed the entire 350 kb NF1 gene, three additional genes, one pseudogene and 16 expressed sequence tags (ESTs). In these cases, both proximal and distal breakpoints mapped at chromosomal regions of high identity, termed NF1REPs. These REPs, or clusters of paralogous loci, are 15-100 kb and harbor at least four ESTs and an expressed SH3GL pseudogene. The remaining three patients had at least one breakpoint outside an NF1REP element; one had a smaller deletion thereby narrowing the critical region harboring the putative locus that exacerbates neurofibroma development to 1 Mb. These data show that the likely mechanism of NF1 microdeletion is homologous recombination between NF1REPs on sister chromatids. NF1 microdeletion is the first REP-mediated rearrangement identified that results in loss of a tumor suppressor gene. Therefore, in addition to the germline rearrangements reported here, NF1REP-mediated somatic recombination could be an important mechanism for the loss of heterozygosity at NF1 in tumors of NF1 patients.