Gene flow between different reproductive units such as bacterial plasmids and chromosomes presents unusual problems for evolutionary analysis. Far more than in eukaryotes, reproductive advantages at several levels of selection--genes, transposons, plasmids, cells, and clones--must be considered simultaneously to understand plasmid evolution. No level consistently prevails in conflict situations, and some reproductive units carry genes that restrain their own reproduction or survival, apparently to enhance the reproduction or survival of the higher-level reproductive units that carry them. Despite gene flow between plasmids and chromosomes, genes for certain functions show strong tendencies to occur on plasmids while others consistently occur on chromosomes. Functions generally associated with plasmids are diverse, but all are useful only in locally restricted contexts; it is argued that the selective consequences of the greater horizontal (within generation) transmission of plasmids are responsible for this pattern. The tendency for prokaryote transposons, which are also horizontally mobile, to carry genes similar to those commonly on plasmids supports this argument. The apparent trends in eukaryote plasmids and transposons to lack these same characters also accords with predictions of the local adaptation hypothesis, because genes on these genetic units are generally no more horizontally mobile than chromosomal genes. There are theoretical reasons to expect that plasmid genes tend to evolve more rapidly than chromosomal genes. "The selfish interests of genes have manifestly produced 'vehicles' in the forms of organelles, cells, individuals and yet higher units. If evolution is to predict as well as describe, then selfish interests must be understood in the framework of the constraints and opportunities generated by these 'vehicles'" (Buss, 1987, p. 182).