Although genomic instability is a hallmark of human cancer cells, the mechanisms by which genomic instability is generated and selected for during oncogenesis remain obscure. In most human cancers, the pathway leading to the activation of the G₁ cyclins is deregulated. Using budding yeast as a model, we show that overexpression of the G₁ cyclin Cln2 inhibits the assembly of prereplicative complexes (pre-RCs) and induces gross chromosome rearrangements (GCR). Our results suggest that deregulation of G₁ cyclins, selected for in oncogenesis because it confers clonal growth advantage, may also provide an important mechanism for generating genomic instability by inhibiting replication licensing.