A novel family of micronuclear elements termed telomere-bearing elements (TBEs) is described. All 1900 family members are eliminated during macronuclear development. We conclude that they are transposons, first because the members are moderately conserved in sequence and probably dispersed in the genome. Second, in two cases, sequence comparison of the termini and flanks of the element with the corresponding empty site indicate that elements cause 3 bp target duplications (AAT) upon insertion; the 3 bp are part of the 5 bp target sequence, AATGA. Lastly, both elements carry 77 or 78 bp inverted terminal repeats. The tip of each inverted terminal repeat is the 17 bp telomere-like sequence 5' C1A4C4A4C4. At least half of the elements have these 17 bp or an extremely similar sequence. One possible pathway for transposition into new micronuclear sites starts in the developing macronucleus with excision to create a free linear form to which telomeres are added, followed by a low frequency of movement to the micronucleus, and insertion into the germ-line micronuclear DNA.