The abundance of short and long interspersed nuclear sequences (SINEs and LINEs) and pseudogenes in eukaryotic genomes indicates that reverse transcriptase (RT)-mediated phenomena are important in genome evolution. However, the mechanisms involved in their spread are largely unknown. We have developed a selection system in the yeast Saccharomyces cerevisiae to test whether RT-mediated events could be linked to the repair of double-strand breaks (DSBs). Here we show that DSBs can be fixed by the insertion of complementary DNAs at the break site. In the presence of functional RT (from human L1, yeast Tyl or Crithidia CRE1), and in the absence of homologous recombination, an HO endonuclease-induced DSB at the mating type (MAT) locus is the primary site at which a marked cDNA is observed among surviving cells. The structure and junctional sequences of these insertions suggest that repair occurs primarily by non-homologous recombination. Our data support a role for endogenous retroelements in the repair of chromosomal breaks.