A transposon-based method of introducing unique restriction sites was used for subdivision of the Escherichia coli genome into a contiguous series of large non-overlapping segments spanning 2.5Mb. The segments, sizes ranging from 150 to 250kb, were isolated from the chromosome using the inserted restriction sites and shotgun cloned into an M13 vector for DNA sequencing. These shotgun sizes proved easily manageable, allowing the genomic sequence of E. coli to be completed more efficiently and rapidly than was possible by previously available methods. The 9bp duplication generated during transposition was used as a tag for accurate splicing of the segments; no further sequence redundancy at the junction sites was needed. The system is applicable to larger genomes even if they are not already well-characterized. We present the technology for segment sequencing, results of applying this method to E. coli, and the sequences of the transposon cassettes.