It has been suggested that the primary evolutionary role of transposable elements is negative and parasitic. Alternatively, the target specificity and gene regulatory capabilities of many transposable elements raise the possibility that transposable element-induced mutations are more likely to be adaptively favorable than other types of mutations. Populations of Saccharomyces cerevisiae containing large amounts of variation for Ty1 genomic insertions were constructed, and the effects of Ty1 copy number on two components of fitness, yield and growth rate were determined. Although mean stationary phase density decreased with increased Ty1 copy number, the variance and range increased. The distributions of stationary phase densities indicate that many Ty1 insertions have negative effects on fitness, but also that some may have positive effects. To test directly for adaptively favorable Ty1 insertions, populations containing large amounts of variability for Ty1 copy number were grown in continuous culture. After 98-112 generations the frequency of clones containing zero Ty1 elements had decreased to approximately 0.0, and specific Ty1-containing clone families had predominated. Considering that most of the genetic variation in the populations was due to Ty1 transposition, and that Ty1 insertions had, on average, a negative effect on fitness, we conclude that Ty1 transposition events were directly responsible for the production of adaptive mutations in the clones that predominated in the populations.