Fifty-nine human DNA samples derived from either normal tissues or hematopoietic neoplasias were examined for rearrangements in the Mlvi-2 locus, a putative oncogene. The rearranged Mlvi-2 sequences in one of them, a B cell lymphoma, were shown to result from the insertion of an approximately 300 bp DNA fragment that hybridized to a human Alu probe. DNA sequence analysis of both the rearranged and the nonrearranged allele around the site of the insertion revealed the following: a) the insert was 88.4% homologous to the consensus sequence of the Alu family of repeats and 75% homologous to the Alu related sequence in the human 7SL RNA; b) similar to other sequenced SINES, a poly(d.A) tract was present at the 3' end of this element; c) an 8 bp direct repeat was present at both ends of the inserted element; d) this repeat was present as a single copy in the unrearranged allele. We conclude from these findings that: Alu sequences can transpose and that the direct repeats flanking certain Alu SINES may be generated by the duplication of single copy cellular sequences at the site of the insertion. Furthermore the recent nature of the Alu insertion in the Mlvi-2 locus coupled to the low degree of homology of the inserted Alu to the Alu related sequence in the 7SL RNA suggest that this event did not occur via reverse transcription and reintegration of the 7SL RNA.