We have physically characterised a deletion mutant of the R plasmid R100 which has lost all of the antibiotic resistances, including chloramphenicol resistance (Cmr), coded by its IS1‐flanked r‐determinant. The deletion was mediated by one of the flanking IS1 elements and terminates within the carboxyl terminus of the Cmr gene. DNA sequence analysis showed that the mutated gene would produce a protein 20 amino acids longer than the wild‐type due to fusion with an open reading frame in the IS element. Surprisingly for a deletion mutation, rare, spontaneous Cmr revertants could be recovered. Two of the four revertants studied had frame shifts due to the insertion of a single AT base pair at the same position; the revertants would code for a protein five amino acids shorter than the wild‐type. The other two revertants had acquired duplications of the 34‐bp inverted terminal repeat sequences of the IS1 element and would direct the synthesis of a protein six amino acids longer than the wild‐type. The reverted Cmr markers were still capable of transposition. These observations suggest a role for point mutations and small DNA rearrangements in the formation of new gene organisations produced by mobile genetic elements.