Haemophilus influenzae is an obligate commensal of the upper respiratory tract of humans that uses simple repeats (microsatellites) to alter gene expression. The mod gene of H. influenzae strain Rd has homology to DNA methyltransferases of type III restriction/modification systems and has 40 tetranucleotide (5′-AGTC) repeats within its open reading frame. This gene was found in 21 out of 23 genetically distinct H. influenzae strains, and in 13 of these strains the locus contained repeats. H. influenzae strains were constructed in which a lacZ reporter was fused to a chromosomal copy of mod downstream of the repeats. Phase variation occurred at a high frequency in strains with the wild-type number of repeats. Mutation rates were derived for similarly engineered strains, containing different numbers of repeats. Rates increased linearly with tract length over the range 17–38 repeat units. The majority of tract alterations were insertions or deletions of one repeat unit with a 2:1 bias towards contractions of the tract. These results demonstrate the number of repeats to be an important determinant of phase variation rate in H. influenzae for a gene containing a microsatellite.