The major DNA repair pathways operate on damage in double-strand DNA because they use the intact strand as a template after damage removal. Therefore, lesions in transient single-strand stretches of chromosomal DNA are expected to be especially threatening to genome stability. To test this hypothesis, we designed systems in budding yeast that could generate many kilobases of persistent single-strand DNA next to double-strand breaks or uncapped telomeres. The systems allowed controlled restoration to the double-strand state after applying DNA damage. We found that lesions induced by UV-light and methyl methanesulfonate can be tolerated in long single-strand regions and are hypermutagenic. The hypermutability required PCNA monoubiquitination and was largely attributable to translesion synthesis by the error-prone DNA polymerase zeta. In support of multiple lesions in single-strand DNA being a source of hypermutability, analysis of the UV-induced mutants revealed strong strand-specific bias and unexpectedly high frequency of alleles with widely separated multiple mutations scattered over several kilobases. Hypermutability and multiple mutations associated with lesions in transient stretches of long single-strand DNA may be a source of carcinogenesis and provide selective advantage in adaptive evolution.