Topoisomerase II (Top2) is an essential enzyme that resolves catenanes between sister chromatids as well as supercoils associated with the over- or under-winding of duplex DNA. Top2 alters DNA topology by making a double-strand break (DSB) in DNA and passing an intact duplex through the break. Each component monomer of the Top2 homodimer nicks one of the DNA strands and forms a covalent phosphotyrosyl bond with the 5' end. Stabilization of this intermediate by chemotherapeutic drugs such as etoposide leads to persistent and potentially toxic DSBs. We describe the isolation of a yeast top2 mutant (top2-F1025Y,R1128G) the product of which generates a stabilized cleavage intermediate in vitro. In yeast cells, overexpression of the top2-F1025Y,R1128G allele is associated with a mutation signature that is characterized by de novo duplications of DNA sequence that depend on the nonhomologous end-joining pathway of DSB repair. Top2-associated duplications are promoted by the clean removal of the enzyme from DNA ends and are suppressed when the protein is removed as part of an oligonucleotide. TOP2 cells treated with etoposide exhibit the same mutation signature, as do cells that overexpress the wild-type protein. These results have implications for genome evolution and are relevant to the clinical use of chemotherapeutic drugs that target Top2.