LINE-1 insertion intermediates recombine with one another or with DNA breaks to form genome rearrangements.

LINE-1 (L1) retrotransposition is common in human cancers and rearrangements at insertion sites can contribute to cancer-driving oncogene amplifications and promote genome instability. However, the mechanisms underlying rearrangements of L1 retrotransposition intermediates are poorly understood. To address this gap, we developed GFP-based recombination reporter assays to study the formation of L1 retrotransposition-mediated rearrangements. Using these reporters combined with long-read sequencing, we find that L1 retrotransposition cDNA intermediates can recombine with distal DNA breaks to generate chromosomal rearrangements. We also find that two independent L1 insertion cDNA intermediates on distinct genomic loci can recombine with each other to generate chromosomal rearrangements. Both types of rearrangements depend on L1-encoded ORF2p endonuclease and reverse transcriptase activities. Using these reporters, we discover that L1 retrotransposition-mediated rearrangements are robustly induced when the recombining sequences share extensive homology and that their formation requires the homologous recombination factor BRCA1. In contrast, we find L1 retrotransposition-mediated rearrangements are suppressed by the mismatch repair factor MSH2 when the recombining sequences contain mismatches. Given the repetitive nature of our genome, these findings highlight the risk of L1 insertion intermediates becoming substrates for aberrant recombination and promoting genome instability.