Tn5 is an excellent model system for understanding the molecular basis of DNA-mediated transposition. Mechanistic information has come from genetic and biochemical investigations of the transposase and its interactions with the recognition DNA sequences at the ends of the transposon. More recently, molecular structure analyses of catalytically active transposase; transposon DNA complexes have provided us with unprecedented insights into this transposition system. Transposase initiates transposition by forming a dimeric transposase, transposon DNA complex. In the context of this complex, the transposase then catalyses four phosphoryl transfer reactions (DNA nicking, DNA hairpin formation, hairpin resolution and strand transfer into target DNA) resulting in the integration of the transposon into its new DNA site. The studies that elucidated these steps also provided important insights into the integration of retroviral genomes into host DNA and the immune system V(D)J joining process. This review will describe the structures and steps involved in Tn5 transposition and point out a biologically important although surprising characteristic of the wild-type Tn5 transposase. Transposase is a very inactive protein. An inactive transposase protein ensures the survival of the host and thus the survival of Tn5.