The bacterial transposon Tn3 encodes a site-specific recombination system. The recombination requires the product of tnpR, a gene previously identified as a repressor of the transposase. This recombination is site specific and takes place somewhere within the sequence C-G-A-A-A-T-A-T-T-A-T-A-A-A-T-T-A-T-C but requires at least one additional sequence outside this. The phenotype of mutations in this recombination system suggests that transposition proceeds by a mechanism in which cointegrates are intermediates.