We have conducted a structure and functional analysis of the hobo transposable element of Drosophila melanogaster. A minimum of 141 bp of the left (L) end and 65 bp of the right (R) end of the hobo were shown to contain sequences sufficient for transposition. Both ends of hobo contain multiple copies of the motifs GGGTG and GTGGC and we show that the frequency of hobo transposition increases as a function of the copy number of these motifs. The R end of hobo contains a unique 12 bp internal inverted repeat that is identical to the hobo terminal inverted repeats. We show that this internal inverted repeat suppresses transposition activity in a hobo element containing an intact L end and only 475 bp of the R end. In addition to establishing cis-sequences requirements for transposition, we analyzed trans-sequence effects of the hobo transposase. We show a hobo transposase lacking the first 49 amino acids catalyzed hobo transposition at a higher frequency than the full-length transposase suggesting that, similar to the related Ac transposase, residues at the amino end of the transposase reduce transposition. Finally, we compared target site sequences of hobo with those of the related Hermes element and found both transposons have strong preferences for the same insertion sites.