A major component of the large genomes of higher plants and vertebrates comprises transposable elements and their derivatives, which potentially reduce the stability of the genome. It has been proposed that methylation of cytosine residues may suppress transposition, but experimental evidence for this has been limited. Reduced methylation of repeat sequences results from mutations in the Arabidopsis gene DDM1 (decrease in DNA methylation), which encodes a protein similar to the chromatin-remodelling factor SWI2/SNF2 (ref. 7). In the ddm1-induced hypomethylation background, silent repeat sequences are often reactivated transcriptionally, but no transposition of endogenous elements has been observed. A striking feature of the ddm1 mutation is that it induces developmental abnormalities by causing heritable changes in other loci. Here we report that one of the ddm1-induced abnormalities is caused by insertion of CAC1, an endogenous CACTA family transposon. This class of Arabidopsis elements transposes and increases in copy number at high frequencies specifically in the ddm1 hypomethylation background. Thus the DDM1 gene not only epigenetically ensures proper gene expression, but also stabilizes transposon behaviour, possibly through chromatin remodelling or DNA methylation.