Mutagenesis of baculoviruses by host mobile elements occurs spontaneously and frequently during propagation of the viruses in Lepidopteran cell cultures. Most of the transposons identified as insertions in baculovirus genomes are relatively small Class II elements that exhibit a remarkable specificity for TTAA target sites. We have developed a transposition assay to analyze the movement of these TTAA-specific Lepidopteran transposons using the baculovirus genome as a target and a lacZ gene under control of the polyhedrin gene promoter as a selective marker for the transposon. This assay provides the first demonstration that a Lepidopteran transposon is capable of transposing while carrying a marker gene in insect cells. The data generated from this assay provide strong evidence that IFP2 encodes a protein that facilitates its own movement. This element may be used in a manner analogous to the P-element to mobilize genes in at least some Lepidopteran insect cells. Transposon tagging within the baculovirus genome identified several known genes and two previously undescribed open reading frames as nonessential to in vitro replication of the virus.