Though it is an essential process, transcription can be a source of genomic instability. For instance, it may generate RNA:DNA hybrids as the nascent transcript hybridizes with the complementary DNA template. These hybrids, called R-loops, act as a major cause of replication fork stalling and DNA breaks. In this study, we show that lowering transcription and R-loop levels in plastids of Arabidopsis thaliana reduces DNA rearrangements and mitigates plastid genome instability phenotypes. This effect can be observed on a genome-wide scale, as the loss of the plastid sigma transcription factor SIG6 prevents DNA rearrangements by favoring conservative repair in the presence of ciprofloxacin-induced DNA damage or in the absence of plastid genome maintenance actors such as WHY1/WHY3, RECA1 and POLIB. Additionally, resolving R-loops by the expression of a plastid-targeted exogenous RNAse H1 produces similar results. We also show that highly-transcribed genes are more susceptible to DNA rearrangements, as increased transcription of the psbD operon by SIG5 correlates with more locus-specific rearrangements. The effect of transcription is not specific to Sigma factors, as decreased global transcription levels by mutation of heat-stress-induced factor HSP21, mutation of nuclear-encoded polymerase RPOTp, or treatment with transcription-inhibitor rifampicin all prevent the formation of plastid genome rearrangements, especially under induced DNA damage conditions.