Genetic instability could be provoked as an unintended consequence of genetic engineering in plants. Here, we report that the rice endogenous long terminal repeat (LTR) retrotransposon Tos17 was transpositionally activated only in transgenic calli and their regenerated plants produced by biolistic transformation in rice (Oryza sativa L.) ssp. japonica cv. Matsumae. Moreover, the transpositional activity of Tos17 was sustained after plant regeneration in the T0 generation, and produced new germinal insertions. In contrast, the element remained totally quiescent in calli and regenerated plants from tissue culture of this genotype. Nonetheless, transcriptional induction and cytosine demethylation of Tos17 were found to have occurred with no significant difference in both kinds of calli, tissue culture alone and transgenic. This suggests that callus culture is likely to have played an important role in destabilizing Tos17 in the direction towards transpositional activation, but that biolistic transformation is the direct causal factor.