Escherichia coli K12 cells carrying a cloned 1.4 kb HindIII fragment from plasmid ColV2-K94, showed increased survival in guinea pig serum. The recombinant plasmid also conferred group II surface exclusion, i.e. the cells were reduced in recipient ability towards the incoming plasmid R538drd in conjugation experiments. Southern blotting suggested homology with bacteriophage lambda DNA and to the insertion element IS2. Determination of the DNA sequence of the fragment demonstrated the presence of a truncated IS2 (165 bp), separated by 250 bp from a 900 bp stretch of homology with lambda DNA, beginning within the Rz gene and continuing in the rightward direction on the lambda map. A 97 amino acid open reading frame (ORF) adjacent to Rz and on the opposite strand, remained intact in iss, with several amino acid changes. The ORF in iss is preceded by sequences resembling prokaryotic ribosome binding sites and promoters.