Covalent modifications of histone N-terminal tails are required for the proper assembly and activation of the general transcription factors at promoters. Here, we analyze histone acetylation and phosphorylation in Drosophila transgenes activated by the yeast Gal4 transcriptional activator in the context of different promoters. We show that, independent of the promoter, transcription does not correlate with acetylation of either H3-Lys 14 or H4-Lys 8. Histone H3 associated with the DNA of Gal4-induced transcribing transgenes driven by the Drosophila Hsp70 promoter is hyperphosphorylated at Ser 10 during transcription. Surprisingly, histone H3 at Gal4-induced transgenes driven by the P element Transposase promoter is not hyperphosphorylated. The data suggest that transcription occurs without acetylated H4 and H3 in both transgenes in Drosophila polytene chromosomes. Instead, phosphorylation of H3 is linked to transcription and can be modulated by the structure of the promoter. Received July 8, 2002; revised version accepted October 31, 2002. Posttranslational covalent modifications of N-terminal tails of the core histones at the nucleosome play an important role in determining chromatin structure, which is an essential component of the control of nuclear biology (Jenuwein and Allis 2001). The expression of a large number of genes from organisms across the phylogenetic scale correlates with histone modifications such as acetylation, methylation, phosphorylation, and ubiquitination in the nucleosomes surrounding the promoter of the gene (Roth et al. 2001;Berger 2002;Fry and Peterson 2002;Sun and Allis 2002). Acetylation of histones H3 and H4 N-terminal tails has been broadly associated with activation of transcription. Histone acetyl-transferases (HATs) are found in a variety of coactivators and transcription factor complexes, whereas histone deacetylases (HDACs) are present in protein complexes with a repressive function (Roth et al. 2001). H3 methylation at Lys 9 has the opposite effect and therefore is found in regions where transcription is repressed by chromatin structure (Rea et al. 2000;Bannister et al. 2001). Phosphorylation of H3 at Ser 10 has also been correlated with activation of transcription in yeast, mammals, and Drosophila (Cheung et al. 2000;Lo et al. 2000;Nowak and Corces 2000;Lo et al. 2001;Thomson et al. 2001;Li et al. 2002;Strelkov and Davie 2002).Two nonexclusive models have been postulated to explain the role of histone N-terminal tail modification in transcription. The first one suggests that histone modifications have an effect on the relative charge of the histone tails, rendering a more open or closed chromatin state that determines the accessibility of transcription factors to the core promoter. The second model, termed the histone code hypothesis, predicts that a combination of covalent modifications of histone tails functions as a target for the specific binding of effector proteins (Turner 2000;Jenuwein and Allis 2001). Binding of these proteins will ultimately determine the transc...