The faithful repair of DNA double-strand breaks (DSBs) is probably one of the most critical tasks for a cell in order to maintain its genomic integrity since these lesions may lead to chromosome breaks or rearrangements, mutations, cell death or cancer. DSBs can arise spontaneously during normal cellular DNA metabolism or may be induced by exogenous agents such as ionizing radiation. To overcome the danger that emanates from these lesions, eukaryotic cells have evolved specific pathways for processing DSBs by either homology-dependent or non-homologous repair mechanisms. This review focuses on the formation of genomic rearrangements that arise by joining incorrect break ends and on the factors that influence repair fidelity. Recent studies indicate that the probability for a break to be incorrectly rejoined is fairly low when DSBs are spatially separated but increases drastically when multiple breaks coincide. The formation of genomic rearrangements in situations of multiple breaks is mediated by non-homologous end-joining, the predominant DSB repair pathway in mammalian cells. Interestingly, the same pathway is required for efficiently preserving chromosomal integrity in situations of separated breaks. Furthermore, the probability for a DSB to be faithfully repaired depends on its genomic location and on the cell cycle position. Methods for assaying DSB repair are discussed, again with emphasis on experimental systems that allow to determine whether a DSB is correctly or incorrectly rejoined.