Much of the eukaryotic genome is known to be mobile, largely due to the movement of transposons and other parasitic elements. Recent work in plants and Drosophila suggests that mobility is also a feature of many nontransposon genes and gene families. Indeed, analysis of the Arabidopsis genome suggested that as many as half of all genes had moved to unlinked positions since Arabidopsis diverged from papaya roughly 72 million years ago, and that these mobile genes tend to fall into distinct gene families. However, the mechanism by which single gene transposition occurred was not deduced. By comparing two closely related species, Arabidopsis thaliana and Arabidopsis lyrata, we sought to determine the nature of gene transposition in Arabidopsis. We found that certain categories of genes are much more likely to have transposed than others, and that many of these transposed genes are flanked by direct repeat sequence that was homologous to sequence within the orthologous target site in A. lyrata and which was predominantly genic in identity. We suggest that intrachromosomal recombination between tandemly duplicated sequences, and subsequent insertion of the circular product, is the predominant mechanism of gene transposition.