A 3-kilobase DNA segment characteristic of a transposable element was found within a histone H2B pseudogene in a higher eukaryote, the sea urchin Strongylocentrotus purpuratus. The inserted segment (TU1) is flanked by 8-base pair (bp) direct repeats of the H2B sequence. TU1 has long terminal inverted repeats ~840 bp long with an outer domain of 15-bp tandem repeats and a non-repeating inner domain, and is a member of a heterogeneous family of transposable elements. TU1 differs from most previously characterized eukaryotic transposable elements with terminal direct repats, but resembles the foldback transposon family in Drosophila.