XRCC3 is a RAD51 paralog that functions in the repair of DNA double-strand 
breaks (DSBs) by homologous recombination (HR). XRCC3 mutation causes severe 
chromosome instability. We find that XRCC3 mutant cells display radically 
altered HR product spectra, with increased gene conversion tract lengths, 
increased frequencies of discontinuous tracts, and frequent local rearrangements 
associated with HR. These results indicate that XRCC3 function is not limited to 
HR initiation, but extends to later stages in formation and resolution of HR 
intermediates, possibly by stabilizing heteroduplex DNA. The results further 
demonstrate that HR defects can promote genomic instability not only through 
failure to initiate HR (leading to nonhomologous repair) but also through 
aberrant processing of HR intermediates. Both mechanisms may contribute to 
carcinogenesis in HR-deficient cells.