Telomere repeat sequences cap the ends of eucaryotic chromosomes and help stabilize them. At interstitial sites, however, they may destabilize chromosomes, as suggested by cytogenetic studies in mammalian cells that correlate interstitial telomere sequence with sites of spontaneous and radiation-induced chromosome rearrangements. In no instance is the length, purity, or orientation of the telomere repeats at these potentially destabilizing interstitial sites known. To determine the effects of a defined interstitial telomere sequence on chromosome instability, as well as other aspects of DNA metabolism, we deposited 800 bp of the functional vertebrate telomere repeat, TTAGGG, in two orientations in the second intron of the adenosine phosphoribosyltransferase (APRT) gene in Chinese hamster ovary cells. In one orientation, the deposited telomere sequence did not interfere with expression of the APRT gene, whereas in the other it reduced mRNA levels slightly. The telomere sequence did not induce chromosome truncation and the seeding of a new telomere at a frequency above the limits of detection. Similarly, the telomere sequence did not alter the rate or distribution of homologous recombination events. The interstitial telomere repeat sequence in both orientations, however, dramatically increased gene rearrangements some 30-fold. Analysis of individual rearrangements confirmed the involvement of the telomere sequence. These studies define the telomere repeat sequence as a destabilizing element in the interior of chromosomes in mammalian cells.