Infection of Escherichia coli by baoteriophage Mu leads to a 100-fold increase in the frequency of lac − mutations in the surviving lysogens. The Mu-induced lac Z mutants were mapped and the mutants were located in 11 of 16 genetic segments of the lac Z gene. Some 13% of the Mu-induced lac Z gene mutants were total deletions of the gene. The Mu prophage is closely linked to the site of mutation in the mappable mutants but is unlinked to the lac Z deletions. It is suggested that the lac Z deletions are caused by a Mu-induced recombination system whereas the mappable mutations are caused by Mu prophage integration into the lac Z gene. Induction of the lac operon leads to a decrease in the frequency of Mu-induced insertion mutations but it does not affect the frequency of deletions.