Etoposide and teniposide, derivatives of podophyllotoxin, are inhibitors of DNA topoisomerase II and are potent anticancer agents. An adverse effect linked to the use of these drugs is the development of acute myeloid leukemia, a disorder usually associated with chromosomal translocation. To examine podophyllotoxin-induced DNA rearrangement, we developed an assay system to measure illegitimate recombination in Saccharomycescerevisiae chromosomes. This approach uses juxtaposed CAN1-CYH2 negative selection markers that are introduced into the LEU2 locus, which is located on chromosome III, in a yeast strain carrying the mutated can1 and cyh2 genes. Upon formation of a deletion over the active CAN1-CYH2 genes, a cell becomes resistant to both canavanine and cycloheximide. To introduce drugs into the cell, we used a yeast strain carrying an ISE2 mutation, thereby making the cell drug-permeable. Here we show that treatment of cells with etoposide (VP-16) increases the rate of illegitimate recombination in yeast, indicating that VP-16 stimulates DNA topoisomerase-mediated illegitimate recombination. Structural analysis of the resulting recombinants indicate that most are formed by deletion mutations on chromosome III, which take place between short homologous regions of DNA. We propose a model for illegitimate recombination, in which VP-16 facilitates formation of a cleavable complex between DNA topoisomerase II and DNA, thus promoting DNA double-strand breakage with the resulting DNA ends joined by a non-homologous mechanism.