ISHp608 from Helicobacter pylori is active in Escherichia coli and represents a recently recognised group of insertion sequences. Its transposase and organisation suggest that it transposes using a different mechanism to that of other known transposons. The IS was shown to excise as a circular form, which is accompanied by the formation of a resealed donor plasmid backbone. We also demonstrate that TnpA, which is less than half the length of other transposases, is responsible for this and for ISHp608 transposition. Transposition was shown to be site specific: both insertion and transposon excision require a conserved target, 5′TTAC. Deletion analysis suggested that potential secondary structures at the left and right ends are important for transposition. In vitro TnpA bound both ends, showed a strong preference for a specific single-stranded DNA and introduced a single-strand break on the same strand at each end. Although many of the characteristics of ISHp608 appear similar to rolling-circle transposons, there are differences suggesting that, overall, transposition occurs by a different mechanism. The results have permitted the formulation of several related models.