Retrons are genetic elements encoding reverse transcriptase (RT) usually located on the chromosome of a wide variety of mostly Gram-negative bacteria. Here we describe a new retron, designated Ne144, found in the chromosome of the myxobacterium Nannocystis exedens. This element codes for a 515-amino-acid RT that is most closely related to those found in other myxobacterial retrons. The RT is responsible for the production of a small satellite DNA called msDNA. This msDNA is composed of a 144 base, single-stranded DNA that is linked to a 72 base single-stranded RNA. The RNA strand is joined to the 5′ end of the DNA chain via a 2′-5′ linkage that occurs from the 2′ position of an internal guanosine residue in the RNA. In addition to the retron element, the chromosome of N. exedens also contains several partial copies of the msDNA sequence as revealed by DNA hybridization experiments using msDNA as a probe. One of these partial copies was characterized from a chromosome restriction fragment and found to contain a sequence that matches the last 82 bases of the DNA strand and five bases of the RNA strand in msDNA-Ne144. This partial copy of msDNA is very likely a retrotransposed sequence that was generated by reverse transcription using an RNA (the primer-template RNA for msDNA) as a template and the 3′ end of a nick in the chromosome as a primer, followed by incorporation into an open reading frame. The presence of this truncated copy of msDNA is strong evidence of retrotransposition in N. exedens causing an alteration in the bacterial genome.