Phase variation, the reversible alternation between genetic states, enables infection by pathogens and colonization by commensals. However, the diversity of phase variation remains underexplored. We developed the PhaseFinder algorithm to quantify DNA inversion-mediated phase variation. A systematic search of 54,875 bacterial genomes identified 4686 intergenic invertible DNA regions (invertons), revealing an enrichment in host-associated bacteria. Invertons containing promoters often regulate extracellular products, underscoring the importance of surface diversity for gut colonization. We found invertons containing promoters regulating antibiotic resistance genes that shift to the ON orientation after antibiotic treatment in human metagenomic data and in vitro, thereby mitigating the cost of antibiotic resistance. We observed that the orientations of some invertons diverge after fecal microbiota transplant, potentially as a result of individual-specific selective forces.