A truncated granulocyte-macrophage colony-stimulating factor (GM-CSF) allele on a putative 5q- chromosome of HL-60 cells was cloned and, by comparison with counterpart normal sequences, analyzed for clues to molecular mechanisms facilitating rearrangement and deletion. Within the 17-kilobase (kb) pair locus surrounding the truncated GM-CSF gene remnant, there are no fewer than four rearranged genomic fragments that seemingly derive from chromosome 5 region q21----23. Two of the fragments, which flank the truncated GM-CSF locus on the 5q-, are contiguous on the normal chromosome 5, centrometric to the normal GM- CSF allele, indicating at least one intrachromosomal insertion event, either preceded or followed by further deletion. Insertion and/or deletion was accompanied by juxtaposition of LINE sequences to the 5′ side of the truncated GM-CSF locus within the inserted fragment. The entire rearranged locus is embedded in repetitive sequences, which may have mediated successive insertions or deletions. The extent of such stepwise deletions, resulting in loss of genes such as interleukin-3 (IL-3), IL-4, IL-5, and GM-CSF, whose gene products are critical to differentiation within the lineage of the affected hematopoietic stem cell, may be mirrored in the heterogeneity of symptoms and 5q- deletion sizes observed in myelodysplasias and acute leukemias carrying a 5q- chromosome. Perhaps most significantly, the sequences surrounding the insertion/deletion region are suggestive of recombination signals, including direct repeats and mirrored repeats. The site of insertion of the GM-CSF 3′ region into an upstream (centromeric) locus is flanked by direct repeats; the upstream site into which it is inserted is also flanked by 12 base pair (bp) direct repeats. After insertion, one member of each pair of repeats is lost. The organization of this rearranged locus implies that direct repeats had a role in the intrachromosomal recombination/deletion event.