Directed mutation is a proposed process that allows mutations to occur at higher frequencies when they are beneficial. Until now, the existence of such a process has been controversial. Here we describe a novel mechanism of directed mutation mediated by the transposon, IS5 in Escherichia coli. crp deletion mutants mutate specifically to glycerol utilization (Glp+) at rates that are enhanced by glycerol or the loss of the glycerol repressor (GlpR), depressed by glucose or glpR overexpression, and RecA-independent. Of the four tandem GlpR binding sites (O1–O4) upstream of the glpFK operon, O4 specifically controls glpFK expression while O1 primarily controls mutation rate in a process mediated by IS5 hopping to a specific site on the E. coli chromosome upstream of the glpFK promoter. IS5 insertion into other gene activation sites is unaffected by the presence of glycerol or the loss of GlpR. The results establish an example of transposon-mediated directed mutation, identify the protein responsible and define the mechanism involved.