Transposable elements are well known for their ability to generate large- and small-scale rearrangements of the sequences flanking their insertion sites. These include deletions, inversions, and duplications. Tam3, a transposon from the Snapdragon (Antirrhinum majus), is highly active in the generation of such rearrangements. We have analysed a number of Tam3-induced rearrangements at the nivea (niv) locus by Southern blotting, cloning, and sequence determination. The data obtained from these analyses have led to an understanding of the mechanisms by which these complex alleles were formed. We have shown that the primary rearrangements usually occur without excision of the element and therefore result from aberrant transposition attempts. Subsequent rearrangements may occur on excision of the element. Finally, we suggest how the analysis of such rearrangements may not only provide information about Tam3 transposition but also show how transposon-induced rearrangements may influence the structure and function of the genome as a whole.