Microcystins are potent peptide toxins produced by a range of distantly related cyanobacteria. They are assembled on a large enzyme complex encoded by the 55 kb microcystin synthetase (mcy) gene cluster. Here we report two strains of the genus Anabaena isolated from the Baltic Sea, which contain the entire mcy gene cluster but do not produce microcystins. Transcription analysis demonstrated that mcy genes were not expressed in these strains. We identified short insertion elements interrupting the mcyA, mcyD and mcyE genes in the two strains isolated in different years from different parts of the Baltic Sea. The 126–207 bp insertion elements encoded both terminal inverted repeats and direct repeats but lacked transposases. However, we found evidence for transposition of these elements despite the absence of genes encoding transposases, suggesting that they are non-autonomous mobile miniature inverted-repeat transposable elements (MITEs) recently described from cyanobacteria. The MITE insertion elements were present in mcyD genes amplified directly from the cyanobacterial community present in the Baltic Sea blooms from 2005. The results demonstrate that mcy gene cluster mutants can make up a stable proportion of the mcy gene pool in the Baltic Sea population.