In ciliated protozoa, development of the macronucleus from a copy of the germ line micronucleus involves elimination of a large number of sequences by DNA splicing akin to precise excision of transposons. The known examples of such internal eliminated sequences (IESs) are not repetitive. The telomere-bearing elements (TBE1s) of Oxytricha fallax are a family of transposons. We show that two particular TBE1s are also IESs. TBE1-1 and TBE1-2 disrupt a micronuclear region that codes for macronuclear DNA. A variety of tests indicates that each TBE1 and one copy of the flanking target repeat is absent from most, if not all, molecules of the macronuclear DNA, as if the TBE1s were precisely excised during macronuclear development. Three alternative explanations for the absence of TBE1-1 and TBE1-2 from the macronuclear DNA were tested. First, because two other highly homologous versions of that DNA are also found in the macronucleus, recombination between versions during or after macronuclear development could have bypassed the elements. Recombination in the regions flanking the elements was not detected. Second, micronuclear DNA blots show no evidence of a micronuclear counterpart of the macronuclear region that lacks TBE1-1. Third, TBE1-2 was demonstrated in two sexually independent cell lines. This shows that it pre-existed in the germ line, as opposed to having transposed into the micronuclear DNA subsequent to the generation of the macronucleus of the vegetative line that is usually studied. We conclude that TBE1-1 and TBE1-2, and possibly many of the other approximately 1900 micronucleus-limited TBE1s are excised as IESs during macronuclear development. These transposons appear to enjoy the luxury of relaxed constraints on family expansion, because they are removed from the genome before it is expressed. We discuss the possibility that all IESs are transposon-derived, that all are excised by transposition machinery, and that linear excision products are early intermediates in transposition.