Insertion sequence IS 1 contains two reading frames, insA and B′- insB, which are responsible for its transposition, and was previously shown to express two proteins. The first, InsA, is the product of insA . The second, InsA-B′-InsB is a fusion of InsA with the product of B′- insB. Synthesis of this protein occurs by a - 1 frameshift from the 3′ region of the insA frame to the open reading frame B′, extending from the 5′ end of the insB frame. Here, I have shown genetically that IS 1 encodes the third species ΔInsA-B′-InsB: ΔInsA-B′-InsB uses two alternative initiation codons in the middle of the insA frame, and is produced by a frameshift mechanism similar to that used in InsA-B′-InsB expression. Deletion of the small region preceding these initiation codons resulted in decreased expression of ΔInsA-B′-InsB, suggesting that the small region play some role in the translation initiation. Surprisingly, it was found that ΔInsA-B′-InsB has transposase-like function and InsA can stimulate the transposition promoted by ΔInsA-B′-InsB, while ΔInsA-B′-InsB seemed to bind to the left terminal inverted repeat (IRL) of IS 1 and inhibit transposition when it was present in excess, as well as InsA represses transposition. It is likely that IS 1 transposition activity depends on the ratio of InsA to ΔInsA-B′-InsB. A double missense mutation of the internal initiation codons resulted in decreased cointegration activity, showing that ΔInsA-B′-InsB is responsible for transposition but InsA-B′-InsB is probably not. Some IS elements, which also contain two tandem, out-of-phase, overlapping genes, appear to express deleted fusion proteins like ΔInsA-B′-InsB, but the functions are unknown. The complex phenomena of transposition and its control found in IS 1 may be more general in the other mobile DNAs.