We have studied the effect on the transposition activity of IS1 of the position and orientation of the element in the donor replicon. Previous studies have shown that the IS1s in the compound transposon Tn9 have different activities in forming plasmid cointegrates. In this study, designed to investigate the sources of this differential activity, we have cloned Tn9 (together with 132 base-pairs of flanking DNA) into several sites in pBR322 and created various derivatives of these plasmids to be used as donor molecules in plasmid fusion experiments. These pBR322-Tn9 plasmids were allowed to form cointegrates with a conjugative, F-derived plasmid, and a large collection of independently formed cointegrates was isolated. The relative activities of the two IS1 elements of Tn9 were estimated by examining the structures of the cointegrates for the frequency of usage of each of the IS1s in cointegrate formation. The results suggest that IS1 activity is modulated by the transcription activity of adjacent DNA sequences in the donor plasmids. Transcription directed into an IS1 inhibits its activity. Confirmatory evidence for this hypothesis is provided by the observation that deletion of adjacent promoters of transcription relieves the inhibitory effect on IS1 activity.