The 4.6 Mb circular E. coli chromosome is compacted by segregation into 400-500 supercoiled domains, created by both active and passive mechanisms like transcription and DNA-binding proteins. We find that transposable prophage Mu, transcriptionally silent by definition, is organized into an independent domain as determined by the close proximity of Mu termini L and R separated by a 37 kb Mu genome. Cre-loxP recombination is used in this study in vivo and in vitro. Critical to formation/maintenance of the Mu 'domain' configuration are a strong gyrase site SGS at the center of Mu, the Mu L end, the MuB protein, and the E. coli nucleoid-associated proteins IHF, Fis and HU. The Mu domain was observed at two structurally different chromosomal locations, and was specific to the Mu prophage, i.e. was not observed for the [mathematical symbol] prophage. A model is proposed that by employing its cis-elements to create a domain barrier for segregation and compaction of its genome, the large selfish DNA element Mu profits from the transposition-ready arrangement of its ends, while simultaneously providing a fitness advantage to the host. / text