Insertions of mobile elements(1-4), mitochondrial DNA(5) and fragments of nuclear chromosomes(6) at DNA double-strand breaks (DSBs) threaten genome integrity and are common in cancer(7-9). Insertions of chromosome fragments at V(D)J recombination loci can stimulate antibody diversification(10). The origin of insertions of chromosomal fragments and the mechanisms that prevent such insertions remain unknown. Here we reveal a yeast mutant, lacking evolutionarily conserved Dna2 nuclease, that shows frequent insertions of sequences between approximately 0.1 and 1.5 kb in length into DSBs, with many insertions involving multiple joined DNA fragments. Sequencing of around 500 DNA inserts reveals that they originate from Ty retrotransposons (8%), ribosomal DNA (rDNA) (15%) and from throughout the genome, with preference for fragile regions such as origins of replication, R-loops, centromeres, telomeres or replication fork barriers. Inserted fragments are not lost from their original loci and therefore represent duplications. These duplications depend on nonhomologous end-joining (NHEJ) and Pol4. We propose a model in which alternative processing of DNA structures arising in Dna2 deficient cells can result in the release of DNA fragments and their capture at DSBs. Similar DNA insertions at DSBs are expected to occur in any cells with linear extrachromosomal DNA fragments.