A 1.2 kb DNA sequence, flanked by a potential seven base target-site duplication, was found inserted into a TOC1 transposable element from Chlamydomonas reinhardtii. The insertion sequence, named TOC2, is a member of a family of repeated DNA sequences that is present in all the C. reinhardtii strains tested. It resembles class II transposable elements: it possesses short 14 bp imperfect terminal repeats that begin AGGAGGGT, and sub-terminal direct repeats located within 250 bp of the termini. No large open reading frames were found. The terminal bases and length of target-site duplication are important in classifying transposable elements. On this basis TOC2 does not fall readily into existing families of class II transposable elements found in plants.