Genetic instability, a heritable increase in the rate of genetic mutation, accelerates evolutionary adaptation1 and is widespread in cancer2,3. In mammals, instability can arise from damage to both copies of genes involved in DNA metabolism and cell cycle regulation4 or from inactivation of one copy of a gene whose product is present in limiting amounts (haploinsufficiency5); however, it has proved difficult to determine the relative importance of these two mechanisms. In Escherichia coli6, the application of repeated, strong selection enriches for genetic instability. Here we have used this approach to evolve genetic instability in diploid cells of the budding yeast Saccharomyces cerevisiae, and have isolated clones with increased rates of point mutation, mitotic recombination, and chromosome loss. We identified candidate, heterozygous, instability-causing mutations; engineering these mutations, as heterozygotes, into the ancestral diploid strain caused genetic instability. Mutations that inactivated one copy of haploinsufficient genes were more common than those that dominantly altered the function of the mutated gene copy. The mutated genes were enriched for genes functioning in transport, protein quality control, and DNA metabolism, and have revealed new targets for genetic instability7,8,9,10,11, including essential genes. Although only a minority (10 out of 57 genes with orthologues or close homologues) of the targets we identified have homologous human genes that have been implicated in cancer2, the remainder are candidates to contribute to human genetic instability. To test this hypothesis, we inactivated six examples in a near-haploid human cell line; five of these mutations increased instability. We conclude that single genetic events cause genetic instability in diploid yeast cells, and propose that similar, heterozygous mutations in mammalian homologues initiate genetic instability in cancer.