A DNA region in the mitochondrial genome of the fungus Phycomyces blakesleeanus (Mucorales, Mucoromycota) was characterized in a population of wild-type strains. The region encodes a predicted protein similar to the reverse transcriptases encoded by mitochondrial retroplasmids of Neurospora species and other Sordariomycetes (Ascomycota), but is uncommon in other fungi. DNA sequences of this element, named mystique, are highly variable between the strains, having greater than 2.5% divergence, yet most of the nucleotide differences fall in codon positions that do not change the amino acid sequence. The high proportion of polymorphisms coupled to the rarity of nonsynonymous changes suggests that mystique is subject to counteracting forces of hypermutation and purifying selection. However, while evidence for negative selection may infer that the element provides a fitness benefit, some strains of P. blakesleeanus do not have the element and grow equivalently well as those strains with it. A mechanism to explain the variability between the mystique alleles is proposed, of error-prone replication through an RNA intermediate, reverse transcription and reintegration of the element into the mitochondrial genome.