Bacteria living in communities can acquire new genes by horizontal gene transfer (HGT) mediated by mobile genetic elements. HGT events are typically identified by comparative genomics, and experimental observation of events remains rare. We have filled this gap with a direct experimental approach to observe HGT. We propagated the bacterium P. fluorescens SBW25 by serial transfer, and added a sample of filtrate devoid of bacteria from a garden compost community to these cultures. By sequencing random colonies after several transfers, we successfully detected the uptake of three foreign elements into the SBW25 genome. The elements are ~23kb, ~44kb and ~55kb in length, and were inserted at the same genomic position, downstream of tmRNA. The MGE classifiers we used returned no consensus in how to categorise the function of genes carried by these elements. The integrated sequences all start with a tyrosine integrase, followed by various putative phage defence systems and end with a homologous stretch of DNA encoding lambda repressors and helicases. How does this new type of MGE transfer and what – if any – benefit it might provide to its new host? I55 (the 55 kb element) was able to circularise spontaneously, but it transferred between SBW25 cells only in the presence of community filtrate. Deletion of the tyrosine integrase fixed I55 in the genome and disabled transfer between cells. Also, I55 has a significant fitness advantage over the wild type in presence of the community filtrate. We suggest the intercellular transfer and fitness benefit of I55 crucially depends on bacteriophages present in the community filtrate. A study of the exact genes in I55 that confer the fitness advantage is currently underway. Our approach has allowed us to witness HGT events in real-time, resulting in identification of a new type of MGE that potentially protects its host from phage attack.