IS117 is a 2527 bp transposable element from Streptomyces coelicolor A3(2) with a circular transposition intermediate. Disruption of ORF1 of IS117, presumed to encode a transposase, abolished transposition. Deletion or mutation of ORF2 and ORF3, which overlap each other on opposite strands of IS117, caused a c. 20-fold reduction in integration frequency of the circular form of IS117 into the Streptomyces lividans chromosome or into the preferred chromosomal target site cloned on a plasmid in transformation experiments. In contrast, inactivation of ORF2/3 did not significantly influence transposition of IS117 derivatives from an already integrated state in the chromosome to the preferred target site cloned on a plasmid. ORF2 mutants apparently excised readily from the S. lividans chromosome, whereas excision of integrated wild-type IS117 derivatives to yield the unoccupied site was not detected; presumably, therefore, the circular transposition intermediate normally arises replicatively. Attempts to promote integration of a plasmid carrying the attachment site of IS117 by providing the ORF1 product in trans were unsuccessful. Most transformation of S. lividans with circular IS117 derivatives yielded tandem chromosomal insertions, which arose by co-transformation rather than dimerization of a monomeric insert. Typically, two to three transforming elements gave a transformed strain, suggesting a local concentration of transposase as a limit on integration.