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Despite being considered a normal flora, <i>Providencia alcalifaciens</i> can cause diarrhea. In a previous study, strain 2939/90, obtained from a diarrheal patient, caused invasion and actin condensation in mammalian cells, and diarrhea in a rabbit model. Four Tn<i>phoA</i> mutants of 2939/90 produced negligible invasion and actin condensation in mammalian cells. Now, the parent strain and the mutants have been sequenced to locate Tn<i>phoA</i> insertion sites and determine the effect on virulence. A Tn<i>phoA</i> insertion was detected in the type three secretion system (T3SS) locus on a large plasmid and not in a T3SS locus on the chromosome. In 52 genomes of <i>P. alcalifaciens</i> surveyed, the chromosomal T3SS locus was present in all strains, including both <i>P. alcalifaciens</i> genomic clades, which we classified as group A and group B. Plasmid T3SS was present in 21 of 52 genomes, mostly in group A genomes, which included isolates from an outbreak of hemorrhagic diarrhea in dogs. The Tn<i>phoA</i> insertion only in the plasmid T3SS locus affected the invasion phenotype, suggested that this locus is critical for causation of diarrhea. We conclude that a subgroup of <i>P. alcalifaciens</i> that possesses this plasmid-mediated T3SS is an enteric pathogen that can cause diarrheal disease.