In addition to their essential role in V(D)J recombination, the RAG proteins function as a transposase capable of inserting the V(D)J recombination intermediate, the signal end DNA fragment, into target DNA. RAG-mediated transposition has been suggested to contribute to genome instability and the development of lymphoid malignancies. Previous studies suggested that the RAG transposase exhibits a target site preference for GC rich sequences and hairpin structures. Here we demonstrate that a transposition hot spot (5'-GCCGCCGGGCC-3'), smaller portions of this hot spot and other GC rich motifs are able to target RAG-mediated transposition. Tracks of GC base pairs have been shown to have an unusually high rate of base pair breathing. Intriguingly, we find that DNA mismatches can efficiently target RAG-mediated transposition and suppress the use of other target sites. Hairpins, however, are not generally preferred targets. Our results indicate that target DNA melting may be a crucial step during RAG-mediated transposition, and that target site selection by the RAG transposase may be intimately linked to mutagenic and metabolic processes that transiently present favorable DNA structures to the transposition machinery.