Loss of heterozygosity (LOH) at tumor suppressor loci is a major contributor to cancer initiation and progression. Both deletions and mitotic recombination can lead to LOH. Certain chromosomal loci known as common fragile sites are susceptible to DNA lesions under replication stress, and replication stress is prevalent in early stage tumor cells. There is extensive evidence for deletions stimulated by common fragile sites in tumors, but the role of fragile sites in stimulating mitotic recombination that causes LOH is unknown. Here, we have used the yeast model system to study the relationship between fragile site instability and mitotic recombination that results in LOH. A naturally occurring fragile site, FS2, exists on the right arm of yeast chromosome III, and we have analyzed LOH on this chromosome. We report that the frequency of spontaneous mitotic BIR events resulting in LOH on the right arm of yeast chromosome III is higher than expected, and that replication stress by low levels of polymerase alpha increases mitotic recombination 12-fold. Using single-nucleotide polymorphisms between the two chromosome III homologs, we mapped the locations of recombination events and determined that FS2 is a strong hotspot for both mitotic reciprocal crossovers and break-induced replication events under conditions of replication stress.