Comparative analysis of chromosomal macrorestriction polymorphism of the two closely related Lactococcus lactis subsp. cremoris strains MG1363 and NCDO763 revealed the presence of a large inversion covering half of the genome. To determine what kind of genetic element could be implicated in this rearrangement, the two inversion junctions of MG1363 and NCDO763 chromosomes were cloned and characterized. Nucleotide sequence analysis showed the presence of one copy of the lactococcal IS905 element in each junction. Each copy of this element contained the same nucleotide mutation that inactivates the putative transposase. Comparison of the sequences surrounding the insertion sequence demonstrated that the large inversion arose from a single-step homologous recombination event between the two defective copies of the IS905 element. The large inversion presumably conferred no selective disadvantage on strain NCDO763 because this rearrangement did not alter the oriC-terC symmetry of the chromosome and the local genetic environment.