Barbara McClintock reported that the Ac/Ds transposable element system can generate major chromosomal rearrangements (MCRs), but the underlying mechanism has not been determined. Here, we identified a series of chromosome rearrangements derived from maize lines containing pairs of closely linked Ac transposable element termini. Molecular and cytogenetic analyses showed that the MCRs in these lines comprised 17 reciprocal translocations and two large inversions. The breakpoints of all 19 MCRs are delineated by Ac termini and characteristic 8-base-pair target site duplications, indicating that the MCRs were generated by precise transposition reactions involving the Ac termini of two closely linked elements. This alternative transposition mechanism may have contributed to chromosome evolution and may also occur during V(D)J recombination resulting in oncogenic translocations.