In eukaryotes, a family of related protein kinases (the ATM family) is involved in regulating cellular responses to DNA damage and telomere length. In the yeast Saccharomyces cerevisiae, two members of this family, TEL1 and MEC1, have functionally redundant roles in both DNA damage repair and telomere length regulation. Strains with mutations in both genes are very sensitive to DNA damaging agents, have very short telomeres, and undergo cellular senescence. We find that strains with the double mutant genotype also have approximately 80-fold increased rates of mitotic recombination and chromosome loss. In addition, the tel1 mec1 strains have high rates of telomeric fusions, resulting in translocations, dicentrics, and circular chromosomes. Similar chromosome rearrangements have been detected in mammalian cells with mutations in ATM (related to TEL1) and ATR (related to MEC1) and in mammalian cells that approach cell crisis.