On August 16, 2000, at 1140 central daylight time, a Boeing 727-264, N764AT, operated by American Trans Air as flight 253, was substantially damaged during pushback at the Midway Airport, Chicago, Illinois. Visual meteorological conditions prevailed at the time of the accident. The 14 CFR Part 121 scheduled domestic passenger flight was operating on a flight plan. The 3 crew members, 4 flight attendants and 98 passengers aboard the aircraft reported no injuries. The driver of the pushback tractor reported no injuries. The flight was destined to the Dallas Fort Worth Airport, Dallas, Texas and was originating at the time of the accident. The driver of the pushback tractor reported that when he applied the brakes to the tractor, the steering wheel "jumped" in his hands and the tractor veered to the right. The tow bar subsequently fractured at the location of a weld and the aircraft impacted the tractor's mirror. Inspection of the tow bar revealed that the fracture occurred within the weld material with some of the weld material still attached to the tow bar. Photos of the tow bar are included in this report.