Transposition of insertion sequence IS10 is regulated by an anti-sense RNA which inhibits transposase expression when IS10 is present in multiple copies per cell. The anti-sense RNA (RNA-OUT) consists of a stem domain topped by a flexibly paired loop; the 5' end of the target molecule, RNA-IN, is complementary to the top of the loop, and complementarity extends for 35 base-pairs down one side of RNA-OUT. We present here genetic evidence that anti-sense pairing, both in vitro and in vivo, initiates by interaction of the 5' end of RNA-IN and the loop domain of RNA-OUT; other features of the reaction are discussed. In the context of this model, we discuss features of this anti-sense system which are important for its biological effectiveness, and suggest that IS10 provides a convenient model for design of efficient artificial anti-sense RNA molecules.