The rickettsial pathogen Anaplasma marginale establishes lifelong persistent infection in the mammalian reservoir host, during which time immune escape variants continually arise in part because of variation in the expressed copy of the immunodominant outer membrane protein MSP2. A key question is how the small 1.2 Mb A. marginale genome generates sufficient variants to allow long-term persistence in an immunocompetent reservoir host. The recombination of whole pseudogenes into the single msp2 expression site has been previously identified as one method of generating variants, but is inadequate to generate the number of variants required for persistent infection. In the present study, we demonstrate that recombination of a whole pseudogene is followed by a second level of variation in which small segments of pseudogenes recombine into the expression site by gene conversion. Evidence for four short sequential changes in the hypervariable region of msp2 coupled with the identification of nine pseudogenes from a single strain of A. marginale provides for a combinatorial number of possible expressed MSP2 variants sufficient for lifelong persistence.