Nucleotide sequences have been determined for the 1.5-kb inverted repeats of Tn5 and for their junctions with the central unique region and with host DNA. The primary findings stemming from this analysis are: 1. Integration of Tn5 is accompanied by the duplication of 9 bp of host DNA. 2. Loss of Tn5 occurs by crossover between short, homologous nucleotide sequences near the junction between Tn5 and host DNA. 3. The IR sequences contain long, open translational reading frames that may code for transposase proteins. 4. The two IR sequences differ by a single-base change. This alteration accounts for the two functional differences observed between IRL and IRR: It shortens the reading frame for the transposase gene in IRL, and it improves the efficiency of a promoter for the nearby Km-resistance gene. 5. The NH2 terminus of the structural gene for the Km-resistance gene maps at the very left border of the unique region, i.e., very close to the end of IRL. These results support the view that the inverted repeats of Tn5 stem from two identical copies of an originally independently moving DNA element. In the transposon, one of these, IRL, seems to have evolved toward a close physical and functional linkage with the antibiotic-resistance gene.