The maize P gene is required for the production of red phlobaphene pigments in the pericarp and cob. The P-vv allele, which specifies variegated pericarp and cob, contains an insertion of the transposable element Ac in the P gene. A new P-ovov allele (orange variegated pericarp and cob) was obtained as a single event mutation from P-vv. In contrast to the progenitor P-vv allele, P-ovov provides substantial pericarp and cob pigmentation and produces significant amounts of normal-sized P transcripts. The Ac element is not detectably altered in the P-ovov allele, but it has transposed to a new position within P that is 161 bp distant and inserted in the opposite orientation. This example provides molecular confirmation for the hypothesis that changes in expression of genes bearing insertions of transposable elements can occur via movement of the element to new sites within the gene.