A detailed study on the geographic distribution, molecular diversity and evolutionary relationships of 24 closely related variants of the Tn5041 transposon found among 182 mercury resistant environmental Gram-negative strains from the IMG-Hg Reference Collection is reported here. RFLP analysis, followed by the determination of partial DNA sequences, identified 14 distinct types of these transposons, which differed from each other by 1-7 single-event DNA polymorphisms. No polymorphisms were detected at the right arm of the transposons except an insertion of a new mobile DNA element carrying a mer operon (named the mer2 cassette) within the Tn5041 mer operon. According to the model presented here, the insertion occurred via homologous recombination with a circular form of the mer2 cassette. A total of 8 point mutations, 1 internal deletion, 2 end-involving deletions, 3 mosaic regions and 2 insertions were detected at the left arm of the transposons. The insertions were a transposon closely related to Tn21 but lacking the integron and a new group II intron (named INT5041C). Inspection of the geographic distribution of the Tn5041 variants suggested that at least three long-distance waves of dissemination of these variants had occurred, accompanied by homologous recombination between different Tn5041 lineages. Movements of circular DNAs by homologous recombination as a source of mosaic genes and new mer genes, and formation of unusual mosaics ending or beginning at the Tn5041 att site are discussed.