We have previously identified three naturally occurring mutations in the medaka fish tyrosinase gene caused by transposable element insertions. Tyr-i(b) is one of these, containing the Tol2 element in the promoter region. Its homozygous carriers exhibit a weak oculocutaneous albino phenotype. We report here spontaneous reversion of the albino phenotype to the wild-type pigmentation, associated with excision of the Tol2 element. The newly arising mutant gene is inherited in the Mendelian fashion. Thus, oculocutaneous albinism is not strictly irreversible, at least in this organism and the results also indicate that the insertion of the Tol2 element is the main, and possibly the only, cause of the i(b) albinism. Importantly our data also suggest that medaka fish possess an active transposase.