A yeast-based frameshift/stop codon assay for examining ATM (ataxia telangiectasia mutated) mutations was established. Each of six fragments of a PCR-amplified coding sequence for ATM is inserted in frame by homologous recombination into a yeast URA3 fusion protein gene, and the transformants are assayed for growth in the absence of uracil. The usefulness of this assay was verified in a panel of cell lines derived from individuals with homozygous and heterozygous ATM mutations. The assay was also shown to distinguish between specimens with wild-type alleles and those with truncating mutations: a frameshift mutation or an inserted stop codon. Using this assay M059J cells, which fail to express the catalytic subunit of DNA-dependent protein kinase (PRKDC, also known as DNA-PKcs) and are hypersensitive to ionizing radiation, were found to express two different aberrant ATM transcripts: one characterized by 4776 del 133, which corresponds to the deletion of exon 33, and the other by 4909 ins 116. Subsequent analysis of the intron sequences revealed that 4909 ins 116 is comprised of a nucleotide sequence corresponding to 84013-84128 in intron 33 with a cryptic splice site. Thus the radiosensitive phenotype of M059J cells appears to be due to a defect in PRKDC and a truncating ATM mutation.