Bacteria contain a large number of transposable elements that can be categorized in four major groups according to their mechanisms of transposition. These are: class I: insertion sequences (IS) and compound transposons (with IS sequences at their termini) which usually require only one protein for transposition to occur (e.g. Tn10); class II: complex transposons and insertion sequences with short inverted repeats in which transposition is replicative and requires two gene products (e.g. Tn3); class III: transposable bacteriophage (e.g. Mu). The fourth group consists of the transposons and IS of variable mechanism, which do not fall into the above classes (e.g. Tn7). We have studied the mechanism of transposition of Tn501 and Tn21, closely-related class II mercury-resistance transposons, which transpose via a cointegrate intermediate. By using genetic methods, we have shown that the region of the 989 amino acid transposase between amino acids 57 and 186 determines the specificity for recognition of the 38-bp terminal inverted repeats of the transposon in normal transposition and for replicon fusion catalysed by a single transposon terminus. The Tn501 transposase has been over-expressed and is functional in vivo, raising the frequency of transposition approximately 10(4)-fold.