Tn10 is a composite transposon; inverted repeats of insertion sequence IS10 flank a tetracycline-resistance determinant. Previous work has identified several regulatory processes that modulate the interaction between Tn10 and its host. Among these, host-specified DNA adenine methylation, an IS10-encoded antisense RNA and preferential cis action of transposase are particularly important. We now find that the accessory host protein IHF and the sequences that encode the IHF-binding site in IS10 are also important regulators of the Tn10 transposition reaction in vivo and that these determinants are involved in two distinguishable regulatory processes. First, IHF and the IHF-binding site of IS10, together with other host components (e.g., HU), negatively regulate the normal intermolecular transposition process. Such negative regulation is prominent only for elements present on multicopy plasmid replicons. This multicopy plasmid-specific regulation involves effects both on the transposition reaction per se and on transposase gene expression. Second, specific interaction of IHF with its binding site stimulates transposon-promoted chromosome rearrangements but not transposition of a short Tn10-length chromosomal element. However, additional considerations predict that IHF action should favor chromosomal transposition for very long composite elements. On the basis of these and other observations we propose that, for chromosomal events, the major role of IHF is to promote the evolution of new IS10-based composite transposons.