Background: Insertions and deletions (indels) are an important evolutionary force, making the evolutionary process more efficient and flexible by copying and removing genomic fragments of various lengths instead of rediscovering them by point mutations. As a mutational process, indels are known to be more active in specific sequences (like micro-satellites) but not much is known about the more general and mechanistic effect of sequence context on the insertion and deletion susceptibility of genomic loci. Results: Here we analyze a large collection of high confidence short insertions and deletions in primates and flies, revealing extensive correlations between sequence context and indel rates and building principled models for predicting these rates from sequence. According to our results, the rate of insertion or deletion of specific lengths can vary by more than 100-fold, depending on the surrounding sequence. These mutational biases can strongly influence the composition of the genome and the rate at which particular sequences appear. We exemplify this by showing how degenerate loci in human exons are selected to reduce their frame shifting indel propensity. Conclusion: Insertions and deletions are strongly affected by sequence context. Consequentially, genomes must adapt to significant variation in the mutational input at indel-prone and indel-immune loci. © 2008 Tanay and Siggia; licensee BioMed Central Ltd.