Compatible/incompatible interactions between the tomato wilt fungus Fusarium oxysporum f. sp. lycopersici (FOL) and tomato Solanum lycopersicum are controlled by three avirulence genes (AVR1–3) in FOL and the corresponding resistance genes (I–I3) in tomato. The three known races (1, 2 and 3) of FOL carry AVR genes in different combinations. The current model to explain the proposed order of mutations in AVR genes is: i) FOL race 2 emerged from race 1 by losing the AVR1 and thus avoiding host resistance mediated by I (the resistance gene corresponding to AVR1), and ii) race 3 emerged when race 2 sustained a point mutation in AVR2, allowing it to evade I2-mediated resistance of the host. Here, an alternative mechanism of mutation of AVR genes was determined by analyses of a race 3 isolate, KoChi-1, that we recovered from a Japanese tomato field in 2008. Although KoChi-1 is race 3, it has an AVR1 gene that is truncated by the transposon Hormin, which belongs to the hAT family. This provides evidence that mobile genetic elements may be one of the driving forces underlying race evolution. KoChi-1 transformants carrying a wild type AVR1 gene from race 1 lost pathogenicity to cultivars carrying I, showing that the truncated KoChi-1 avr1 is not functional. These results imply that KoChi-1 is a new race 3 biotype and propose an additional path for emergence of FOL races: Race 2 emerged from race 1 by transposon-insertion into AVR1, not by deletion of the AVR1 locus; then a point mutation in race 2 AVR2 resulted in emergence of race 3.