Evidence is presented indicating that a novel DNA sequence arrangement generated by in vitro recombination may elicit high frequency transpositions of IS elements. A 109 bp Bam HI fragment of the cDNA for the immunoglobulin K light chain from MOPC 321 myeloma was cloned into the Bam HI site of pBR313. The cloned fragment extends from the codon for Gly 57 to the V-J junction. Insertions of IS1 or IS5 were identified in 6 of 50 plasmid DNAs isolated from freshly transformed clones. Additional transposition events were detected after subculturing for several growth cycles. Three independent insertions of IS1 occurred in the promoter region of the TcR operon. All IS5 and the remaining IS1 insertions were located in the TcR region upstream to the cloned DNA sequence. Sequences homologous to the ends of IS1, or corresponding to the consensus sequence at the target site of IS5 are present near the estimated sites of insertion of IS1 or IS5 respectively. Bacteria harboring recombinant plasmids carrying the cloned DNA in either orientation grew at a reduced rate relative to cells harboring pBR313, suggesting that fused gene products made from the two types of plasmid were inhibitory to cell growth. IS insertions, which relieved this inhibitory effect and thereby provided a selective advantage, were found exclusively in plasmids carrying the cloned DNA in only one of the two orientations. The fact that IS elements were not observed in the other type of recombinant plasmid indicates that selective pressure alone is not sufficient to account for the frequent IS insertions observed and that sequences at a distance from the site of IS insertion may be critical in the regulation of transposition frequency.