Desulfitobacterium sp. strain Y51 exhibits a strong dechlorinating activity for tetrachloroethene (PCE), converting it to cis-1,2-dichloroethene via trichloroethene by the action of the PceA reductive dehalogenase (encoded by pceA). The gene organization around the pceA gene cluster was determined to be in the following order: orf4, orf3, ISDesp1, pceA-B-C-T-mcpA, and ISDesp2, where the pceA gene cluster is surrounded by two nearly identical copies of the ISDesp insertion sequence. Serial subculture of strain Y51 gave rise to variants that abolished the PCE-dechlorination activity. Southern hybridization analysis revealed two types of variants termed small deletion (SD) and large deletion (LD). The characterization of both variants revealed a genetic rearrangement around the pceAB gene cluster. In variant SD, ISDesp1 comprised of 1,572 bp was deleted, which includes the tnpAa encoding IS256 family transposase and unknown orf1. The ISDesp1 contained the inverted terminal repeat sequence and a -35 promoter stretch just upstream of the pceA gene, indicating that this IS element is involved in the formation of the variant SD. Loss of the pceA transcription changed the variant SD to the PCE-nondechlorinating phenotype. The variant LD lost the 6.5-kb region, including one copy of ISDesp and the pceABCT-mcpA gene cluster, confirming that the homologous recombination is associated with the emergence of this variant.