Biofilm formation of Staphylococcus epidermidis on smooth polymer surfaces has been shown to be mediated by the ica operon. Upon activation of this operon, a polysaccharide intercellular adhesin (PIA) is synthesized that supports bacterial cell-to-cell contacts and triggers the production of thick, multilayered biofilms. Thus, the ica gene cluster represents a genetic determinant that significantly contributes to the virulence of specific Staphylococcus epidermidis strains. PIA synthesis has been reported recently to undergo a phase variation process. In this study, biofilm-forming Staphylococcus epidermidis strains and their PIA-negative phase variants were analysed genetically to investigate the molecular mechanisms of phase variation. We have characterized biofilm-negative variants by Southern hybridization with ica-specific probes, polymerase chain reaction and nucleotide sequencing. The data obtained in these analyses suggested that in ≈30% of the variants the missing biofilm formation was due to the inactivation of either the icaA or the icaC gene by the insertion of the insertion sequence element IS256. Furthermore, it was shown that the transposition of IS256 into the ica operon is a reversible process. After repeated passages of the PIA-negative insertional mutants, the biofilm-forming phenotype could be restored. Nucleotide sequence analyses of the revertants confirmed the complete excision of IS256, including the initially duplicated 8 bp target sites. These results elucidate, for the first time, a molecular mechanism mediating phase variation in staphylcocci, and they demonstrate that a naturally occurring insertion sequence element is actively involved in the modulation of expression of a Staphylococcus virulence factor.