In recent years, evidence has accumulated that suggests that mammalian topoisomerase may play a role in the formation of spontaneous or chemically induced sister chromatid exchange (SCE). In microbial systems, nalidixic acid is known to disrupt the function of a topoisomerase-like enzyme, DNA gyrase. To explore the possible relationship to topoisomerase function and SCE formation in mammalian cells, an analog of nalidixic acid with potent topoisomerase II inhibitory activity was selected for examination in a variety of genetic toxicology assays. This analog, CP-67,015, proved to be a positive direct-acting mutagen in the L5178Y/TK+/-, CHO/HGPRT, and V79/HGPRT systems. However, no gene mutational activity was observed using the Ames test in direct plate, mouse and rat metabolic activation, and mouse urine tests. In vitro cytogenetic studies showed strong clastogenic activity in human lymphocytes and in CHO cells. Compound-induced chromosome damage was also observed in vivo in mouse bone marrow cells. Surprisingly, SCE studies in vitro in human lymphocytes or CHO cells showed only slight increases, even at levels producing severe chromosome breakage. Mouse bone marrow showed no significant elevation of SCE following parenteral treatment with CP-67,015. These results, taken together, demonstrate that CP-67,015 is a direct-acting mutagen in mammalian cells with both gene and chromosomal level effects. The relative ineffectiveness in producing SCEs suggests that CP-67,015 may interfere with a DNA replicative/repair process, perhaps by alteration of one or more DNA polymerase activities. This suggestion is based in part on the known effect of the analog nalidixic acid on DNA gyrase in microbial cells and on topoisomerase in mammalian cells. The profile of genetic activity of CP-67,015, coupled with its inhibitory effect on topoisomerase function, gives rise to a model for SCE formation that is based on anomalies of topoisomerase activity during DNA synthesis.