Transposition is one of the primary mechanisms causing genome instability. This phenomenon is mechanistically related to other DNA rearrangements such as V(D)J recombination and retroviral DNA integration. In the Tn5 system, only one protein, the transposase (Tnp), is required for all of the catalytic steps involved in transposon movement. The complexity involved in moving multiple DNA strands within one active site suggests that, in addition to the specific contacts maintained between Tnp and its recognition sequence, Tnp also interacts with the flanking DNA sequence. Here, we demonstrate that Tnp interacts with the donor DNA region. Tnp protects the donor DNA from DNase I digestion, suggesting that Tnp is in contact with, or otherwise distorts, the donor DNA during synapsis. In addition, changes in the donor DNA sequence within this region alter the affinity of Tnp for DNA by eightfold during synapsis. In vitro selection for more stable synaptic complexes reveals an A/T sequence bias for this region. We further show that certain donor DNA sequences, which favor synapsis, also appear to serve as hot spots for strand transfer. The TTATA donor sequence represents the best site. Most surprising is the fact that this sequence is found within the Tnp recognition sequence. Preference for insertion into a site within the Tnp recognition sequence would effectively inactivate one copy of the element and form clusters of the Tn5 transposon. In addition, the fact that several donor DNA sequences, which favor synapsis, appear to serve as hot spots for transposon insertion suggest that similar criteria may exist for Tnp-donor DNA and Tnp-target DNA interactions.