DNA rearrangements, including insertions, deletions, and inversions, control gene expression in numerous prokaryotic and eukaryotic systems, ranging from phase variation of surface antigens in pathogenic bacteria to generation of Ig diversity in human B cells. We report here that precise excision of the mobile element IS492 from one site on the Pseudoalteromonas atlantica chromosome directly correlates with phase variation of peripheral extracellular polysaccharide ((p)EPS) production from OFF (epsG::IS492) to ON (epsG(+)). In a previously undescribed application of quantitative PCR, we determined that the frequency of this transposase-dependent precise excision is remarkably high, ranging from 10(-3) to 10(-2) per cell per generation. High-frequency excision resulting in nonmutagenic repair of donor DNA is extremely unusual for classical transposable elements. Interestingly, high-frequency precise excision of IS492 does not occur at four different insertion sites on the P. atlantica chromosome, despite identity in the IS492 nucleotide sequences and 5- to 7-bp flanking DNA. The genome sequence revealed that epsG-associated IS492 is the only element inserted within a gene. Quantitative RT-PCR assays for externally derived transposase transcripts from each IS492 copy showed that IS492 at epsG has higher levels of host-initiated transcription through the element, suggesting that transcription per se or an increase in transposase (mooV) expression is responsible for the effect of chromosomal position on element excision. MooV levels and excision activity for IS492 inserted in forward and reverse orientations relative to plac and pT7 in Escherichia coli support that external transcription of mooV boosts transposase to a critical level required for detectable excision.