Triplet-repeat expansions cause several inherited human diseases. Expanded triplet-repeats are unstable in somatic cells, and tissue-specific somatic instability contributes to disease pathogenesis. In mammalian cells instability of triplet-repeats is dependent on the location of the origin of replication relative to the repeat tract, supporting the 'fork-shift' model of repeat instability. Disease-causing triplet-repeats are transcribed, but how this influences instability remains unclear. We examined instability of the expanded (GAA•TTC)(n) sequence in mammalian cells by analyzing individual replication events directed by the SV40 origin from five different locations, in the presence and absence of doxycycline-induced transcription. Depending on the location of the SV40 origin, either no instability was observed, instability was caused by replication with no further increase due to transcription, or instability required transcription. Whereas contractions accounted for most of the observed instability, one construct showed expansions upon induction of transcription. These expansions disappeared when transcript stability was reduced via removal or mutation of a spliceable intron. These results reveal a complex interrelationship of transcription and replication in the etiology of repeat instability. While both processes may not be sufficient for the initiation of instability, transcription and/or transcript stability seem to further modulate the fork-shift model of triplet-repeat instability.