TEL-AML1 gene fusion derived by chromosomal translocation is a common acquired genetic lesion in pediatric cancer that is present in approximately 25% of B-cell precursor acute lymphoblastic leukemias, and recent evidence suggests that this recombination event may initiate leukemogenesis prenatally during fetal hemopoiesis. Analysis of the DNA sequence and structure surrounding the breakpoints may reveal clues to their formation. A long-distance inverse PCR strategy was used to amplify TEL-AML1 genomic fusion sequences from diagnostic DNA from nine patients. Breakpoints were scattered within the 14 kb of intronic DNA between exons 5 and 6 of TEL and in two putative cluster regions within AML1 intron 1. Fusion sequences exhibited characteristic signs of nonhomologous end joining, including microhomologies at the end points, and small deletions and duplications. DNA sequences near the breakpoints did not reveal any consistent characteristic signal sequences of the V(D)J recombinase, topoisomerase II consensus sites, or other sequence motifs associated with recombination. However, several translocations occurred near a repeat region of TEL that was found to be highly polymorphic. This region was cloned and found in nuclease sensitivity assays to exhibit paranemic structures, which may have contributed to DNA breakage or illegitimate recombination. The data are compatible with the possibility that TEL-AML1 translocations occur by nonhomologous recombination involving imprecise, constitutive repair processes following DNA double-strand breaks.