In Gram-negative bacteria, the insertion sequence IS26 plays a major role in disseminating antibiotic resistance via the formation of compound transposons carrying resistance genes. We have shown that in addition to the well-known replicative transposition mode, IS26 can use a conservative, self-targeted reaction to form a cointegrate between two DNA molecules that each contain a copy of the IS. In the products of the conservative reaction, the two IS26 are always in direct orientation. We have demonstrated that a mutation internal to one of the IS was distributed to either of the IS flanking an incoming segment, suggesting that the strand exchange(s) occur at the same end but can occur with equal efficiency at either IS end. To test this, the terminal bases of IS26 (GG and CC) were replaced and transposition frequency was determined. Replicative cointegrate formation could not be detected when the terminal bases at the left or right end were converted to AA or TT, respectively. However, when a wild type IS26 target was available, the conservative reaction occurred at a frequency equivalent to that observed when both participating IS were wild-type. In the products, the mutation was found in the position predicted if strand exchange(s) occurred at the end of the IS that was unaltered. Only when both ends were altered was conservative cointegrate formation prevented. Hence, either two left or two right IS ends must be brought together in the conservative mode. In contrast, in the replicative mode both ends are needed.