Extragenic sequences in genomes, such as microRNA and CRISPR, are vital players in the cell. Repetitive extragenic palindromic sequences (REPs) are a class of extragenic sequences, which form nucleotide stem-loop structures. REPs are found in many bacterial species at a high copy number and are important in regulation of certain bacterial functions, such as Integration Host Factor recruitment and mRNA turnover. Although a new clade of putative transposases (RAYTs or TnpAREP) is often associated with an increase in these repeats, it is not clear how these proteins might have directed amplification of REPs. We report here the structure to 2.6 Å of TnpAREP from Escherichia coli MG1655 bound to a REP. Sequence analysis showed that TnpAREP is highly related to the IS200/IS605 family, but in contrast to IS200/IS605 transposases, TnpAREP is a monomer, is auto-inhibited and is active only in manganese. These features suggest that, relative to IS200/IS605 transposases, it has evolved a different mechanism for the movement of discrete segments of DNA and has been severely down-regulated, perhaps to prevent REPs from sweeping through genomes.