Expansion of simple DNA repeats is responsible for numerous hereditary diseases in humans. The role of DNA replication, repair and transcription in the expansion process has been well documented. Here we analyzed, in a yeast experimental system, the role of RNA–DNA hybrids in genetic instability of long (GAA)n repeats, which cause Friedreich’s ataxia. Knocking out both yeast RNase H enzymes, which counteract the formation of RNA–DNA hybrids, increased (GAA)n repeat expansion and contraction rates when the repetitive sequence was transcribed. Unexpectedly, we observed a similar increase in repeat instability in RNase H-deficient cells when we either changed the direction of transcription-replication collisions, or flipped the repeat sequence such that the (UUC)n run occurred in the transcript. The increase in repeat expansions in RNase H-deficient strains was dependent on Rad52 and Pol32 proteins, suggesting that break-induced replication (BIR) is responsible for this effect. We conclude that expansions of (GAA)n repeats are induced by the formation of RNA–DNA hybrids that trigger BIR. Since this stimulation is independent of which strand of the repeat (homopurine or homopyrimidine) is in the RNA transcript, we hypothesize that triplex H-DNA structures stabilized by an RNA–DNA hybrid (H-loops), rather than conventional R-loops, could be responsible.