Paramutation is observed when the Antirrhinum majus lines 44 and 53 are crossed. These two lines both have insertions at the nivea locus, which encodes chalcone synthase (chs). The allele niv-53 carries the transposable element Tam1 in the promoter region of the chs gene; niv-44 carries the element Tam2 within the gene. The Tam1 element has previously been extensively characterised. Here the Tam2 element is further characterised, and the arrangement of the nivea locus in paramutant plants is analysed. The complete sequence of Tam2, and that of a partial cDNA complementary to it, have been determined. The cDNA is probably transcribed from a different copy of Tam2 from that present at the nivea locus, and does not encode a functional protein. Genomic Southerns of F1 plants from the 53/44 cross show that no major rearrangements are consistently associated with paramutation at the nivea locus of A. majus. The isolation from a paramutant plant arising from a 53/44 cross of an allele (niv-4432) resulting from the excision of Tam2 is reported. The excision of Tam2 resulted in a 32 bp deletion of chs gene sequences. Plants homozygous for the new niv-4432 allele have white flowers and are still paramutagenic, demonstrating that Tam2 need not be present at the nivea locus for paramutation to occur. Different interactions between Tam1 and Tam2 are discussed, and a possible model for paramutation is presented.