In the summer of 1944 at Cold Spring Harbor Laboratory, McClintock began systematic studies on the mechanisms of the mosaic color patterns of maize seed and the unstable inheritance of this mosaicism. She identified two new dominant and interacting genetic loci that she named Dissociator (Ds) and Activator (Ac). She found that the Dissociator did not just dissociate or cause the chromosome to break, it also had a variety of effects on neighboring genes when the Activator was also present. In early 1948, she made the surprising discovery that both Dissociator and Activator could transpose, or change position, on the chromosome.

She observed the effects of the transposition of Ac and Ds by the changing patterns of coloration in maize kernels over generations of controlled crosses, and described the relationship between the two loci through intricate microscopic analysis. She concluded that Ac controls the transposition of the Ds from chromosome 9, and that the movement of Ds is accompanied by the breakage of the chromosome. When Ds moves, the aleurone-color gene is released from the suppressing effect of the Ds and transformed into the active form, which initiates the pigment synthesis in cells. The transposition of Ds in different cells is random, it may move in some but not others, which causes color mosaicism. The size of the colored spot on the seed is determined by stage of the seed development during dissociation. McClintock also found that the transposition of Ds and the is determined by the number of Ac copies in the cell.

Between 1948 and 1950, she developed a theory by which these mobile elements regulated the genes by inhibiting or modulating their action. She referred to Dissociator and Activator as "controlling units"—later, as "controlling elements"—to distinguish them from genes. She hypothesized that gene regulation could explain how complex multicellular organisms made of cells with identical genomes have cells of different function. McClintock's discovery challenged the concept of the genome as a static set of instructions passed between generations. In 1950, she reported her work on Ac/Ds and her ideas about gene regulation in a paper entitled "The origin and behavior of mutable loci in maize" published in the journal Proceedings of the National Academy of Sciences. In summer 1951, when she reported on her work on gene mutability in maize at the annual symposium at Cold Spring Harbor Laboratory, the paper she presented was called "The origin and behavior of mutable loci in maize".

Her work on controlling elements and gene regulation was conceptually difficult and was not immediately understood or accepted by her contemporaries; she described the reception of her research as "puzzlement, even hostility". Nevertheless, McClintock continued to develop her ideas on controlling elements. She published a paper in Genetics in 1953 where she presented all her statistical data, and undertook lecture tours to universities throughout the 1950s to speak about her work. She continued to investigate the problem and identified a new element that she called Suppressor-mutator (Spm), which, although similar to Ac/Ds, displays more complex behavior. Based on the reactions of other scientists to her work, McClintock felt she risked alienating the scientific mainstream, and from 1953 stopped publishing accounts of her research on controlling elements.

In 1957, McClintock received funding from the National Science Foundation, and the Rockefeller Foundation sponsored her to start research on maize in South America, an area that is rich in varieties of this species. She was interested in studying the evolution of maize, and being in South America would allow her to work on a larger scale. McClintock explored the chromosomal, morphological, and evolutionary characteristics of various races of maize. From 1962, she supervised four scientists working on South American maize at the North Carolina State University in Raleigh. Two of these Rockefeller fellows, Almiro Blumenschein and T. Angel Kato, continued their research on South American races of maize well into the 1970s. In 1981, Blumenschein, Kato, and McClintock published Chromosome constitution of races of maize, which is considered a landmark study of maize that has contributed significantly to the fields of evolutionary botany, ethnobotany, and paleobotany.[citation needed]

McClintock officially retired from her position at the Carnegie Institution in 1967, and was made a Distinguished Service Member of the Carnegie Institution of Washington. This honor allowed her to continue working with graduate students and colleagues in the Cold Spring Harbor Laboratory as scientist emerita. In reference to her decision 20 years earlier no longer to publish detailed accounts of her work on controlling elements, she wrote in 1973:

Over the years I have found that it is difficult if not impossible to bring to consciousness of another person the nature of his tacit assumptions when, by some special experiences, I have been made aware of them. This became painfully evident to me in my attempts during the 1950s to convince geneticists that the action of genes had to be and was controlled. It is now equally painful to recognize the fixity of assumptions that many persons hold on the nature of controlling elements in maize and the manners of their operation. One must await the right time for conceptual change.

The importance of McClintock's contributions only came to light in the 1960s, when the work of French geneticists Francois Jacob and Jacques Monod described the genetic regulation of the lac operon, a concept she had demonstrated with Ac/Ds in 1951. Following Jacob and Monod's 1961 Journal of Molecular Biology paper "Genetic regulatory mechanisms in the synthesis of proteins", McClintock wrote an article for American Naturalist comparing the lac operon and her work on controlling elements in maize. McClintock's contribution to biology is still not widely acknowledged as amounting to the discovery of genetic regulation.

McClintock was widely credited for discovering transposition following the discovery of the process in bacteria and yeast in the late 1960s and early 1970s. During this period, molecular biology had developed significant new technology, and scientists were able to show the molecular basis for transposition. In the 1970s, Ac and Ds were cloned by other scientists and were shown to be Class II transposons. Ac is a complete transposon that can produce a functional transposase, which is required for the element to move within the genome. Ds has a mutation in its transposase gene, which means that it cannot move without another source of transposase. Thus, as McClintock observed, Ds cannot move in the absence of Ac. Spm has also been characterized as a transposon. Subsequent research has shown that transposons typically do not move unless the cell is placed under stress, such as by irradiation or the breakage, fusion, and bridge cycle, and thus their activation during stress can serve as a source of genetic variation for evolution. McClintock understood the role of transposons in evolution and genome change well before other researchers grasped the concept. Nowadays, Ac/Ds is used as a tool in plant biology to generate mutant plants used for the characterization of gene function.[citation needed]