We have developed a plasmid-based system for isolating gene rearrangements in mammalian cells by selection for reversion of a promoterless drug resistance gene. pNH4 contains the selectable marker gene neo under the control of the herpes simplex virus, thymidine kinase (tk) promoter and, upstream and in the opposite orientation, a dormant promoterless hygromycin B resistance gene (hph) that can be expressed following rearrangement events. An NIH 3T3 cell line stably transfected with pNH4 that has a spontaneous frequency of generation of Hph(r) colonies of ~10-8 was isolated. Treatment of this line with ethyl methanesulfonate raised the frequency of Hph(r) colony formation ~100-fold. Approximately 60% (21 of 35) of ethyl methanesulfonate-induced Hph(r) clones showed rearrangements detectable by Southern blot analysis within a 40-kb region surrounding the integrated construct, including a nonhomologous recombination event and, possibly, a large insertion. Additionally, three Hph(r) clones showed evidence of gene amplification. Northern (RNA) blot analysis of hph mRNA suggests that the rearrangements may provide a function that allows the tk promoter to initiate transcription off the opposite strand, thus yielding hph transcripts. Cell lines harboring pNH4, or modifications of it, may be valuable for studying recombination mechanisms responsible for the various types of genetic rearrangements found in cancer cells.