Mobile genetic elements (MGEs) play a central role in the evolution of bacterial genomes. Transposable elements (TE: transposons and insertion sequences) represent an important group of these elements. Comprehension of the dynamics of genome evolution requires an understanding of how the activity of TEs is regulated and how their activity responds to the physiology of the host cell. This article presents an overview of the large range of, often astute, regulatory mechanisms, which have been adopted by TEs. These include mechanisms intrinsic to the element at the level of gene expression, the presence of key checkpoints in the recombination pathway and the intervention of host proteins which provide a TE/host interface. The multiplicity and interaction of these mechanisms clearly illustrates the importance of limiting transposition activity and underlines the compromise that has been reached between TE activity and the host genome. Finally, we consider how TE activity can shape the host genome.