Insertion sequences (ISs) are widespread prokaryotic transposable elements, often regarded as genomic parasites that primarily cause deleterious mutations. However, they can also promote adaptive changes. These antagonistic properties make their overall impact on prokaryotic evolution difficult to grasp. Here, we tackle this problem by leveraging the framework of transposon ecology to analyze IS occurrences across and within 30,409 prokaryotic genomes. Combining phylogenomics with multi-scale genomic analysis and modeling, we provide evidence for group behavior, whereby ISs collectively contribute to the construction of their own niche, whose spread is found to be limited within chromosomes. Niches are shared with other mobile genetic elements and exhibit spatial partitioning reminiscent of ecological niche differentiation. Our results further suggest both physical and ecological isolation, with up to 100 kb long niches characterized by particularly variable, heterogeneous, and AT-rich sequences. We also find evidence of functional roles of IS families, and of regulatory mechanisms modulating IS activity. Altogether, our comprehensive transposon ecology approach offers novel insights and new avenues for understanding IS-host interactions and genome evolution, moving beyond traditional host-centric perspectives.