The Mycobacterium tuberculosis complex is associated with a remarkably low level of structural gene polymorphism. As part of a search for alternative forms of genetic variation that may act as a source of biological diversity in M. tuberculosis, we have identified a region of the genome that is highly variable amongst a panel of unrelated clinical isolates. Fifteen of 24 isolates examined contained one or more copies of the M. tuberculosis-specific IS6110 insertion element within this 20 kb variable region. In nine of the isolates, including the laboratory-passaged strain H37Rv, genomic deletions were identified, resulting in loss of between two and 13 genes. In each case, deletions were associated with the presence of a copy of the IS6110 element. Absence of flanking tri- or tetra-nucleotide repeats identified homologous recombination between adjacent IS6110 elements as the most likely mechanism of the deletion events. IS6110 insertion into hot-spots within the genome of M. tuberculosis provides a mechanism for generation of genetic diversity involving a high frequency of insertions and deletions.