The yeast Saccharomyces cerevisiae has about 30 to 50 copies of a transposable element Ty. Most of these elements are located at the 5' ends of protein coding sequences and are flanked by a 5 bp duplication. We report below an insertion of a Ty element into one of the repeated ribosomal RNA (rRNA) genes of yeast. The element is located between the 3' ends of the divergentally transcribed 37S and 5S rRNA's and is not flanked by a 5 bp duplication. In addition, one end of the Ty insertion is contiguous with a 306 bp deletion of the sequences of the rRNA gene. We find that this insertion, unlike most Ty insertions, is mitotically unstable.