Transposable elements are useful tools for insertional mutagenesis and have many potential applications in the characterization of complex genomes. Here we describe a system which facilitates the construction of large transposon insertion libraries useful for genome sequencing and functional genomic analysis. We developed two transposons, TyK and TyK'GFP+, which can be introduced into target DNAs by Ty1-mediated transposition in vitro, and several modifications which decrease the frequency of false transposition events and direct the recovery of transpositions into passenger rather than vector DNA. Insertions of TyK'GFP+ additionally may yield fusions to the Aequorea green fluorescent protein (GFP), useful in studies of gene expression and protein targeting. Transposition in vitro was obtained into target DNAs of up to 50 kb in size, restriction mapping showed insertion to be relatively random, and the sequence of 55 insertion sites showed neither strong site nor base compositional preference. Our data suggest that TyK-based artificial transposons will be suitable for a variety of genetic applications in many organisms.