Diketoacid (DKA) compounds have been shown to inhibit HIV-1 integrase by a mechanism that involves sequestration of the active site metals. Because HIV-1 integrase and Tn5 transposase have similar active site architectures and catalytic mechanisms, we investigated whether DKA analogues would inhibit Tn5 transposase activity and provide a model system to explore the mechanisms of action of these inhibitors. A screen of several hundred DKA analogues identified several with activity against Tn5 Tnp. Six DKA inhibitors used in this study manifested a variety of effects on different transposition steps suggesting that different analogues may have different binding contacts with transposase. All DKA compounds inhibited paired end complex (PEC) formation in which the nucleoprotein complex required for catalysis is assembled. Dissociation of PECs by some DKA compounds indicates that these inhibitors can decrease PEC stability. Four DKA compounds inhibited the two cleavage steps releasing transposon DNA from flanking DNA, and one of these four compounds preferentially inhibited the second cleavage step. The differential effect of this inhibitor on the second cleavage event indicates that cleavage of the two transposon-donor DNA boundaries is a sequential process requiring a conformational change. The requirement for a conformational change between cleavage events was also demonstrated by the inability of transposase to perform second cleavage at 25 degrees C. Finally, all six compounds inhibit strand transfer, the final step of Tn5 transposition. Two of the compounds that inhibited strand transfer have no effect on DNA cleavage. The strand transfer inhibition properties of various DKA compounds was sensitive to the structure of the 5'-non-transferred strand, suggesting that these compounds bind in or near the transposase active site. Other results that probe compound binding sites include the effects of active site mutations and donor DNA on DKA compound inhibition activities. Thus, DKA inhibitors will provide an important set of tools to investigate the mechanism of action of transposases and integrases.