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Mutation is fundamental to evolution, because it generates the genetic variation on which selection can act. In nature, genetic changes often increase the mutation rate in systems that range from viruses and bacteria to human tumors. Such an increase promotes the accumulation of frequent deleterious or neutral alleles, but it can also increase the chances that a population acquires rare beneficial alleles. Here, we study how up to 100-fold increases in Escherichia coli’s genomic mutation rate affect adaptive evolution. To do so, we evolved multiple replicate populations of asexual E. coli strains engineered to have four different mutation rates for 3000 generations in the laboratory. We measured the ability of evolved populations to grow in their original environment and in more than 90 novel chemical environments. In addition, we subjected the populations to whole genome population sequencing. Although populations with higher mutation rates accumulated greater genetic diversity, this diversity conveyed benefits only for modestly increased mutation rates, where populations adapted faster and also thrived better than their ancestors in some novel environments. In contrast, some populations at the highest mutation rates showed reduced adaptation during evolution, and failed to thrive in all of the 90 alternative environments. In addition, they experienced a dramatic decrease in mutation rate. Our work demonstrates that the mutation rate changes the global balance between deleterious and beneficial mutational effects on fitness. In contrast to most theoretical models, our experiments suggest that this tipping point already occurs at the modest mutation rates that are found in the wild.