Pseudomonas putida strain PP3 produces two hydrolytic dehalogenases encoded by dehI and dehII, which are members of different deh gene families. The 9.74-kb DEH transposon containing dehI and its cognate regulatory gene, dehRI, was isolated from strain PP3 by using the TOL plasmid pWW0. DEH was fully sequenced and shown to have a composite transposon structure, within which dehI and dehRI were divergently transcribed and were flanked on either side by 3.73-kb identical direct repeats. The flanking repeat unit, designated ISPpu12, had the structure of an insertion sequence in that it was bordered by 24-bp near-perfect inverted repeats and contained four open reading frames (ORFs), one of which was identified as tnpA, putatively encoding an ISL3 family transposase. A putative lipoprotein signal peptidase was encoded by an adjacent ORF, lspA, and the others, ISPpu12 orf1 and orf2, were tentatively identified as a truncated cation efflux transporter gene and a PbrR family regulator gene, respectively. The orf1-orf2 intergenic region contained an exact match with a previously described active, outward-orientated promoter, Pout. Transposition of DEH-ISPpu12 was investigated by cloning the whole transposon into a suicide plasmid donor, pAWT34, and transferring the construct to various recipients. In this way DEH-ISPpu12 was shown to transpose in a broad range of Proteobacteria. Transposition of ISPpu12 independently from DEH, and inverse transposition, whereby the vector DNA and ISPpu12 inserted into the target genome without the deh genes, were also observed to occur at high frequencies in P. putida PaW340. Transposition of a second DEH-ISPpu12 derivative introduced exogenously into P. putida PP3 via the suicide donor pAWT50 resulted in silencing of resident dehI and dehII genes in about 10% of transposition transconjugants and provided a genetic link between transposition of ISPpu12 and dehalogenase gene silencing. Database searches identified ISPpu12-related sequences in several bacterial species, predominantly associated with plasmids and xenobiotic degradative genes. The potential role of ISPpu12 in gene silencing and activation, as well as the adaptation of bacteria to degrade xenobiotic compounds, is discussed.