A system for insertional mutagenesis and chromosomal rearrangement in Arabidopsis has been developed. The T-DNA vectors are based on the maize transposon Ds, lox sites from the Cre-lox site-specific recombination system, and transcriptional fusions expressing Ac transposase or Cre recombinase. The engineered transposon is termed Dslox. Transposed Dslox insertions were created by crossing plants bearing Dslox with plants expressing Ac transposase, then simultaneously selecting for excision and reinsertion in F2 seedlings using the herbicides chlorsulfuron and phosphonothricin, respectively. F2 plants bearing stable Dslox insertions were identified by scoring for the absence of the Ac transposase T-DNA, using a novel, visual marker in that T-DNA. Two independent Dslox insertions were characterized and placed 5.6 and 16.5 cM from their T-DNAlox, which mapped close to m506 on chromosome 4. Plants bearing either of the two different transposed Dsloxs and T-DNAlox were crossed to plants expressing Cre recombinase, which catalyzed recombination between the lox site in transposed Dslox and the lox site in T-DNAlox. Lox-lox recombinants were identified selectively amongst progeny of these crosses. Molecular and genetic analysis of the lox-lox rearrangements indicated that both were inversions. The smaller inversion was germinally transmitted from generation to generation as a simple trait, whereas the larger inversion was not transmitted to progeny of plants bearing the rearrangement.