Barbara McClintock first showed that transposable elements in maize can induce major chromosomal rearrangements, including duplications, deletions, inversions, and translocations. More recently, researchers have made significant progress in elucidating the mechanisms by which transposons can induce genome rearrangements. For the Ac/Ds transposable element system, rearrangements are generated when the termini of different elements are used as substrates for transposition. The resulting alternative transposition reaction directly generates a variety of rearrangements. The size and type of rearrangements produced depend on the location and orientation of transposon insertion. A single locus containing a pair of alternative transposition-competent elements can produce a virtually unlimited number of genome rearrangements. With a basic understanding of the mechanisms involved, researchers are beginning to utilize both naturally occurring and in vitro-generated configurations of transposable elements in order to manipulate chromosome structure.