Although polymorphic inversions in Drosophila are very common, the origin of these chromosomal rearrangements is unclear. The breakpoints of the cosmopolitan inversion 2j of D. buzzatii were cloned and sequenced. Both breakpoints contain large insertions corresponding to a transposable element. It appears that the two pairs of target site duplications generated upon insertion were exchanged during the inversion event, and that the inversion arose by ectopic recombination between two copies of the transposon that were in opposite orientations. This is apparently the mechanism by which transposable elements generate natural inversions in Drosophila.