The DNA transposon piggyBac is widely used as a tool in mammalian experimental systems for transgenesis, mutagenesis, and genome engineering. We have characterized genome-wide insertion site preferences of piggyBac by sequencing a large set of integration sites arising from transposition from two separate genomic loci and a plasmid donor in mouse embryonic stem cells. We found that piggyBac preferentially integrates locally to the excision site when mobilized from a chromosomal location and identified other nonlocal regions of the genome with elevated insertion frequencies. piggyBac insertions were associated with expressed genes and markers of open chromatin structure and were excluded from heterochromatin. At the nucleotide level, piggyBac prefers to insert into TA-rich regions within a broader GC-rich context. We also found that piggyBac can insert into sites other than its known TTAA insertion site at a low frequency (2%). Such insertions introduce mismatches that are repaired with signatures of host cell repair pathways. Transposons could be mobilized from plasmids with the observed noncanonical flanking regions, indicating that piggyBac could generate point mutations in the genome.