Extensive genomic sequencing and sequence motif analysis have been conducted over the integration sites of two transgenic rice plants, #478 and #559, carrying the luciferase gene and/or hygromycin phosphotransferase gene. The transgenes reside in a region with inverted structure and a large duplication of rice genome over 2 kb. Integration was found at the AT-rich region and/or at the repetitive sequence region, including a SAR-like structure, retrotransposon and telomere repeats. The presence of a patch of sequence homology between plasmid and target DNA, and a small region of duplication involving the target DNA around the recombination site, implicated illegitimate recombination in the process of gene integration. Massive rearrangement of genomic DNA including deletion or translocation was also observed at the integration site and the flanking region of the transgene. The recognition sites of DNA topoisomerases I or II were observed in the rearranged sequences. Since only three junctions of transgenic rice were implicated in the illegitimate recombination and extensive rearrangement of the rice genome, rice protoplasts may be active in this process.