DNA replication stress causes genome mutations, rearrangements, and chromosome missegregation, which are implicated in cancer. We analyze a fission yeast mutant that is unable to complete S phase due to a defective subunit of the MCM helicase. Despite underreplicated and damaged DNA, these cells evade the G2 damage checkpoint to form ultrafine bridges, fragmented centromeres, and uneven chromosome segregations that resembles micronuclei. These micronuclei retain DNA damage markers and frequently rejoin with the parent nucleus. Surviving cells show an increased rate of mutation and chromosome rearrangement. This first report of micronucleus-like segregation in a yeast replication mutant establishes underreplication as an important factor contributing to checkpoint escape, abnormal chromosome segregation, and chromosome instability. 