TSG101 is a recently discovered tumor susceptibility gene whose functional inactivation in mouse fibroblasts results in cell transformation and the ability to form metastatic tumors in nude mice. Although restoration of TSG101 activity reverses tumorigenesis, neoplasia is irreversible in some cells, suggesting that permanent genetic alteration can occur during TSG101 inactivation. Here we describe studies that support this notion. We find that localization of TSG101 is cell cycle-dependent, occurring in the nucleus and Golgi complex during interphase, and in mitotic spindles and centrosomes during mitosis; cells made neoplastic by a deficiency in TSG101 expression show a series of mitosis-related abnormalities, including multiple microtubule organizing centers, aberrant mitotic spindles, abnormal distribution of metaphase chromatin, aneuploidy, and nuclear anomalies. Our findings suggest that TSG101 deficiency may lead to genome instability in addition to previously reported reversible neoplastic transformation.