Abstract Chromosomal instability (CIN), the increase in the rate of whole/partial chromosome gains and losses, is a driving feature of cancer identified in ~90% of solid tumours. CIN generates intratumor heterogeneity (ITH), drives evolutionary adaptation, and is associated with highly aggressive, drug-resistant tumours and poor prognosis. Aberrations in numerous pathways have been suggested to increase CIN. However, how CIN is initiated and maintained in non-small cell lung cancer (NSCLC) is largely unknown. Here we have analysed multi-region WES sequencing data from patients of the TRACERx study, and identified novel genes involved in the DNA damage response (DDR) that may contribute to chromosomal instability. Using orthogonal methods, we have identified that genetic alteration in 6 genes, particularly FAT1, culminates in deficiencies in homologous recombination repair (HRR). This is manifested by a reduction of RAD51 and BRCA1 foci formation, reduced end-resection rate and increased 53BP1 bodies. We find that these deficiencies in the HRR pathway can lead to an increase in structural CIN and deviation from the modal cjromosome number. Furthermore, we observed an early selection of FAT1 mutations in the TRACERx421 LUSC cohort, which resulted in more genome-doubling. We reprot mirrored sub-clonal allelic imbalance (MSAI) events at the FAT1 gene locus, indicating parallel evolution. We have proceeded to validate these observations using several cell lines, showing that FAT1 loss promotes whole genome doubling (WGD) through the generation of actively replicating binucleated cells through an elevated mitotic error rate. Importantly, the elevated CIN induced by FAT1 loss could be partially ameliorated by co-depletion of the oncogene YAP1. We hypothesize that elevated CIN could synergize with WGD to generate increased intratumor heterogeneity. To investigate this, we modelled the relationship between FAT1 loss and genome doubling in an isogenic cell culture system using PC9 cells which are sensitive to the EGFR inhibitor, Osimertinib. Indeed, we observed an elevated rate of acquired resistance in FAT1 KO genome-doubled PC9 cells, which we attribute to the high CIN level generated by FAT1 loss. In line with our hypothesis, we also observed a significant increase in genome content in FAT1 KO cells, suggesting FAT1 loss induces a second WGD event to escape targeted therapy. In conclusion, FAT1 is one of the most frequently mutated genes both in the TRACERx421 cohort and in somatic tissues (Martincorena et al, Science 2015). We postulate that FAT1 loss attenuates DDR and exacerbates CIN to enhance tumour heterogeneity, early in lung cancer evolution. Our observation that FAT1 loss leads to elevated EGFRi resistance also provides a unique opportunity to understand how EGFRi resistance arises through elevated CIN. Citation Format: Wei-Ting Lu, Lykourgos-Panagiotis Zalmas, Chris Bailey, Oriol Pich, Carlos M. Ruiz, James Black, Georgia Stavrou, Dhruva Biswas, Francisco Gimeno-Valiente, Kevin Litchfield, Jiri Bartek, Nicholas McGranahan, Nnennaya Kanu, Charles Swanton. Functional characterisation of TRACERx reveals mechanisms of NSCLC evolution [abstract]. In: Proceedings of the American Association for Cancer Research Annual Meeting 2023; Part 2 (Clinical Trials and Late-Breaking Research); 2023 Apr 14-19; Orlando, FL. Philadelphia (PA): AACR; Cancer Res 2023;83(8_Suppl):Abstract nr LB237.