Functional evolution of an arsenic resistance operon has been accomplished by DNA shuffling, involving multiple rounds of in vitro recombination and mutation of a pool of related sequences, followed by selection for increased resistance in vivo. Homologous recombination is achieved by random fragmentation of the PCR templates and reassembly by primerless PCR. Plasmid-determined arsenate resistance from plasmid pl258 encoded by genes arsR, arsB, and arsC was evolved in Escherichia coli. Three rounds of shuffling and selection resulted in cells that grew in up to 0.5 M arsenate, a 40-fold increase in resistance. Whereas the native plasmid remained episomal, the evolved operon reproducibly integrated into the bacterial chromosome. In the absence of shuffling, no increase in resistance was observed after four selection cycles, and the control plasmid remained episomal. The integrated ars operon had 13 mutations. Ten mutations were located in arsB, encoding the arsenite membrane pump, resulting in a fourfold to sixfold increase in arsenite resistance. While arsC, the arsenate reductase gene, contained no mutations, its expression level was increased, and the rate of arsenate reduction was increased 12-fold. These results show that DNA shuffling can improve the function of pathways by complex and unexpected mutational mechanisms that may be activated by point mutation. These mechanisms may be difficult to explain and are likely to be overlooked by rational design.