The regulator of the yiaK-S operon, currently assigned a carbohydrate utilization function in Escherichia coli, is inactivated by a genome rearrangement that leads to the constitutive expression of the operon. The yiaK-S constitutive cells acquire the ability to utilize the rare pentose L-lyxose. Restriction analysis and sequencing of the regulator gene indicate that it is disrupted by foreign DNA. The insert consists of a large inverted fragment of DNA of 920 kilobases flanked by two IS1 elements with opposite polarity. One corresponds to that found naturally at min 0.4 of the bacterial chromosome and the other to a new copy transposed into the regulator gene located at min 80.6. This insertion-inversion could be the result of the intramolecular transposition mechanism itself, a gene rearrangement rarely originated by IS1. Alternatively, it could be attributed to the homologous recombination between the IS1 at min 0.4 and the IS1 transposed intermolecularly into the yiaK-S regulator gene. The participation of a rare IS1-mediated inversion in the evolution of a stable phenotype is thus identified.