Transposons are massively abundant in all eukaryotic genomes and are suppressed by epigenetic silencing. Transposon activity contributes to the evolution of species; however, it is unclear how much transposition-induced variation exists at a smaller scale and how transposons are targeted for silencing. Here, we exploited differential silencing of the AtMu1c transposon in the Arabidopsis thaliana accessions Columbia (Col) and Landsberg erecta (Ler). The difference persisted in hybrids and recombinant inbred lines and was mapped to a single expression quantitative trait locus within a 20-kb interval. In Ler only, this interval contained a previously unidentified copy of AtMu1c, which was inserted at the 3' end of a protein-coding gene and showed features of expressed genes. By contrast, AtMu1c(Col) was intergenic and associated with heterochromatic features. Furthermore, we identified widespread natural AtMu1c transposition from the analysis of over 200 accessions, which was not evident from alignments to the reference genome. AtMu1c expression was highest for insertions within 3' untranslated regions, suggesting that this location provides protection from silencing. Taken together, our results provide a species-wide view of the activity of one transposable element at unprecedented resolution, showing that AtMu1c transposed in the Arabidopsis lineage and that transposons can escape epigenetic silencing by inserting into specific genomic locations, such as the 3' end of genes.