The human cell line LM205, transformed with the pLR309 plasmid, contains a stably integrated selectable gene marker (neo) without a transcriptional promoter. Spontaneous tandem duplication at the integration site relocates a Simian virus 40 transcriptional promoter to a position 5' to the neo gene at a rate of 5 x 10(-8) events/cell/generation, as measured by subsequent resistance of the cells to the toxic antibiotic G418. The heterogeneity in the site of recombination observed in various G418-resistant (G418-R) subclones indicates that the sequences involved have little or no homology. The rate of tandem duplication involving the neo gene was not affected by DNA-damaging agents or by inhibitors of DNA synthesis. Although these tandem duplications were relatively stable in most G418-R subclones, others underwent further amplification of the neo gene during cloning. In one such cell line, RS-4, subclones isolated without G418 demonstrated a high degree of heterogeneity in the neo gene copy number (2-20), indicating that amplification was associated with a high rate of homologous recombination. Because LM205 was the only clone out of the 30 original clones transformed with pLR309 that demonstrated spontaneous G418-R colonies, cell DNA sequences near the integrated neo gene may promote this recombination. Inclusion of this cell DNA in the initial tandem duplication might then explain the high rate of duplication and deletion observed in the region of the neo gene in the RS-4 subclone.