Oxidative DNA damage is likely to be involved in the etiology of cancer and is thought to accelerate tumorigenesis via increased mutation rates. However, the majority of malignant cells acquire a specific type of genomic instability characterized by large-scale genomic rearrangements, referred to as chromosomal instability (CIN). The molecular mechanisms underlying CIN are not entirely understood. We utilized Saccharomyces cerevisiae as a model system to delineate the relationship between genotoxic stress and CIN. It was found that elevated levels of chronic, unrepaired oxidative DNA damage caused chromosomal aberrations at remarkably high frequencies under both selective and nonselective growth conditions. In this system, exceeding the cellular capacity to appropriately manage oxidative DNA damage resulted in a "gain-of-CIN" phenotype and led to profound karyotypic instability. These results illustrate a novel mechanism for genome destabilization that is likely to be relevant to human carcinogenesis.