Ionizing radiation is an established source of chromosome aberrations (CAs). Although double-strand breaks (DSBs) are implicated in radiation-induced and other CAs, the underlying mechanisms are poorly understood. Here, we show that, although the vast majority of randomly induced DSBs in G(2) diploid yeast cells are repaired efficiently through homologous recombination (HR) between sister chromatids or homologous chromosomes, approximately 2% of all DSBs give rise to CAs. Complete molecular analysis of the genome revealed that nearly all of the CAs resulted from HR between nonallelic repetitive elements, primarily Ty retrotransposons. Nonhomologous end-joining (NHEJ) accounted for few, if any, of the CAs. We conclude that only those DSBs that fall at the 3-5% of the genome composed of repetitive DNA elements are efficient at generating rearrangements with dispersed small repeats across the genome, whereas DSBs in unique sequences are confined to recombinational repair between the large regions of homology contained in sister chromatids or homologous chromosomes. Because repeat-associated DSBs can efficiently lead to CAs and reshape the genome, they could be a rich source of evolutionary change.