Hypermutable tandem repeat sequences (TRSs) are present in the genomes of both prokaryotic and eukaryotic organisms. Numerous studies have been conducted in several laboratories over the past decade to investigate the mechanisms responsible for expansions and contractions of microsatellites (a subset of TRSs with a repeat length of 1-6 nucleotides) in the model prokaryotic organism Escherichia coli. Both the frequency of tandem repeat instability (TRI), and the types of mutational events that arise, are markedly influenced by the DNA sequence of the repeat, the number of unit repeats, and the types of cellular pathways that process the TRS. DNA strand slippage is a general mechanism invoked to explain instability in TRSs. Misaligned DNA sequences are stabilized both by favorable base pairing of complementary sequences and by the propensity of TRSs to form relatively stable secondary structures. Several cellular processes, including replication, recombination and a variety of DNA repair pathways, have been shown to interact with such structures and influence TRI in bacteria. This paper provides an overview of our current understanding of mechanisms responsible for TRI in bacteria, with an emphasis on studies that have been carried out in E. coli. In addition, new experimental data are presented, suggesting that TLS polymerases (PolII, PolIV and PolV) do not contribute significantly to TRI in E. coli.