Cell surface-located sialic acids of the capsule and the lipooligosaccharide (LOS) are both pivotal virulence factors in Neisseria meningitidis, promoting survival and dissemination of this pathogen which can cause both sepsis and meningitis. With the aid of a unique set of isogenic meningococcal mutants defective in the expression of cell surface-located sialic acids, we have demonstrated that encapsulation hinders the primary event in the development of the disease, but the spontaneous switching of encapsulated wild-type bacteria to a capsule-negative phenotype promotes meningococcal adherence and invasion into mucosal epithelial cells. Genetic analysis of the capsule-negative, invasive bacteria revealed a unique mechanism for modulation of capsule expression based on the reversible inactivation of an essential sialic acid biosynthesis gene, siaA, by insertion/excision of a naturally occurring insertion sequence element, IS1301. Inactivation of siaA regulates both capsule expression and endogenous LOS sialylation. This is the first example of an insertion sequence element-based genetic switch mechanism in the pathogenic bacterium and is an important step in the understanding of bacterial virulence.