Abstract The genome of Saccharomyces cerevisiae contains numerous unstable microsatellite sequences. Mononucleotide and dinucleotide repeats are rarely found in ORFs, and when present in an ORF are frequently located in an intron or at the C terminus of the protein, suggesting that their instability is deleterious to gene function. DNA trinucleotide repeats (TNRs) are found at a higher-than-expected frequency within ORFs, and the amino acids encoded by the TNRs represent a biased set. TNRs are rarely conserved between genes with related sequences, suggesting high instability or a recent origin. The genes in which TNRs are most frequently found are related to cellular regulation. The protein structural database is notably lacking in proteins containing amino acid tracts, suggesting that they are not located in structured regions of a protein but are rather located between domains. This conclusion is consistent with the location of amino acid tracts in two protein families. The preferred location of TNRs within the ORFs of genes related to cellular regulation together with their instability suggest that TNRs could have an important role in speciation. Specifically, TNRs could serve as hot spots for recombination leading to domain swapping, or mutation of TNRs could allow rapid evolution of new domains of protein structure.