The bacterial insertion sequence IS21 contains two genes, istA and istB, which are organized as an operon. IS21 spontaneously forms tandem repeats designated (IS21)2. Plasmids carrying (IS21)2 react efficiently with other replicons, producing cointegrates via a cut-and-paste mechanism. Here we show that transposition of a single IS21 element (simple insertion) and cointegrate formation involving (IS21)2 result from two distinct non-replicative pathways, which are essentially due to two differentiated IstA proteins, transposase and cointegrase. In Escherichia coli, transposase was characterized as the full-length, 46 kDa product of the istA gene, whereas the 45 kDa cointegrase was expressed, in-frame, from a natural internal translation start of istA. The istB gene, which could be experimentally disconnected from istA, provided a helper protein that strongly stimulated the transposase and cointegrase-driven reactions. Site-directed mutagenesis was used to express either cointegrase or transposase from the istA gene. Cointegrase promoted replicon fusion at high frequencies by acting on IS21 ends which were linked by 2, 3, or 4 bp junction sequences in (IS21)2. By contrast, cointegrase poorly catalyzed simple insertion of IS21 elements. Transposase had intermediate, uniform activity in both pathways. The ability of transposase to synapse two widely spaced IS21 ends may reside in the eight N-terminal amino acid residues which are absent from cointegrase. Given the 2 or 3 bp spacing in naturally occurring IS21 tandems and the specialization of cointegrase, the fulminant spread of IS21 via cointegration can now be understood.