Inverted repeats of insertion sequences (ISs) are indispensable for transposition. We demonstrate that sub-terminal sequences adjacent to the inverted repeats of IS30 are also required for optimal transposition activity. We have developed a cell-free recombination system and showed that the transposase catalyses formation of a figure-of-eight transposition intermediate, where a 2 bp long single strand bridge holds the inverted repeat sequences (IRs) together. This is the first demonstration of the figure-of-eight structure in a non-IS3 family element, suggesting that this mechanism is likely more widely adopted among IS families. We show that the absence of sub-terminal IS30 sequences negatively influences figure-of-eight production both in vivo and in vitro. These regions enhance IR-IR junction formation and IR-targeting events in vivo. Enhancer elements have been identified within 51 bp internal to IRL and 17 bp internal to IRR. In the right end, a decanucleotide, 5'-GAGATAATTG-3', is responsible for wild-type activity, while in the left end, a complex assembly of repetitive elements is required. Functioning of the 10 bp element in the right end is position-dependent and the repetitive elements in the left end act cooperatively and may influence bendability of the end. In vitro kinetic experiments suggest that the sub-terminal enhancers may, at least partly, be transposase-dependent. Such enhancers may reflect a subtle regulatory mechanism for IS30 transposition.