The conversion of Pseudomonas aeruginosa PAO to the mucoid phenotype has been reported for a chronic pulmonary infection model in rats (D. E. Woods, P. A. Sokol, L. E. Bryan, D. G. Storey, S. J. Mattingly, H. J. Vogel, and H. Ceri, J. Infect. Dis. 163:143-149, 1991). This conversion was associated with a genetic rearrangement upstream of the exotoxin A gene. To characterize the genetic rearrangement, the region upstream of the toxA gene was cloned from PAO, PAO-muc (a mucoid strain), and PAO-rev (a nonmucoid revertant strain). The nucleotide sequence of a 4.8-kb fragment from PAO-muc was determined. A+T-rich regions of approximately 2 kb (IS-PA-4) and 0.4 kb (IS-PA-5) were identified in this fragment. DNA probes constructed internal to these regions hybridized to PAO-muc but not to PAO or PAO-rev, suggesting that PAO-muc contains an insertion element. Sequence analysis of the nonmucoid clones indicated that a 2,561-bp fragment corresponding to IS-PA-4 and a 992-bp fragment corresponding to IS-PA-5 were not present in PAO or PAO-rev. Both nonmucoid clones, however, contained in the same location as IS-PA-4, a 1,313-bp region which was not present in PAO-muc. DNA probes complementary to this sequence, designated IS-PA-6, did not hybridize with PAO-muc, indicating that this sequence had been replaced upon conversion to the mucoid phenotype. Between IS-PA-4 and IS-PA-5 there was a 500-bp sequence which was 94% identical to the 500-bp sequence downstream of IS-PA-6. These insertion elements had some DNA sequence similarity to plasmid and transposon sequences, suggesting that they may be of plasmid origin. IS-PA-4 and IS-PA-5 were shown also to be present in two mucoid isolates from cystic fibrosis patients. The insertions occurred in the same location upstream of the toxA gene, suggesting that this type of genetic recombination may also be associated with mucoid conversion in some P. aeruginosa clinical isolates.