The human zoonotic pathogen Escherichia coli O157 is defined by its extensive prophage repertoire including those that encode Shiga toxin, the factor responsible for inducing life-threatening pathology in humans. As well as introducing genes that can contribute to the virulence of a strain, prophage can enable the generation of large-chromosomal rearrangements (LCRs) by homologous recombination. This work examines the types and frequencies of LCRs across the major lineages of the O157 serogroup

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... and defines the phenotypic consequences of specific structural variants. We demonstrate that LCRs are a major source of genomic variation across all lineages of E. coli O157 and by using both optical mapping and ONT long-read sequencing demonstrate that LCRs are generated in laboratory cultures started from a single colony and particular variants are selected during animal colonisation. LCRs are biased towards the terminus region of the genome and are bounded by specific prophages that share large regions of sequence homology associated with the recombinational activity. RNA transcriptional profiling and phenotyping of specific structural variants indicated that important virulence phenotypes such as Shiga toxin production, type 3 secretion and motility are affected by LCRs. In summary, E. coli O157 has acquired multiple prophage regions over time that act as genome engineers to continually produce structural variants of the genome. This structural variation is a form of epigenetic regulation that generates sub-population phenotypic heterogeneity with important implications for bacterial adaptation and survival.