Although the Drosophila Y chromosome is degenerated, heterochromatic, and contains few genes, increasing evidence suggests that it plays an important role in regulating the expression of numerous autosomal and X-linked genes. Here we use 15 Y chromosomes originating from a single founder 550 generations ago to study the role of the Y chromosome in regulating rRNA gene transcription, position-effect variegation (PEV), and the link among rDNA copy number, global gene expression, and chromatin regulation. Based on patterns of rRNA gene transcription indicated by transcription of the retrotransposon R2 that specifically inserts into the 28S rRNA gene, we show that X-linked rDNA is silenced in males. The silencing of X-linked rDNA expression by the Y chromosome is consistent across populations and independent of genetic background. These Y chromosomes also vary more than threefold in rDNA locus size and cause dramatically different levels of PEV suppression. The degree of suppression is negatively associated with the number and fraction of rDNA units without transposon insertions, but not with total rDNA locus size. Gene expression profiling revealed hundreds of differentially expressed genes among these Y chromosome introgression lines, as well as a divergent global gene expression pattern between the low-PEV and high-PEV flies. Our findings suggest that the Y chromosome is involved in diverse phenomena related to transcriptional regulation including X-linked rDNA silencing and suppression of PEV phenotype. These results further expand our understanding of the role of the Y chromosome in modulating global gene expression, and suggest a link with modifications of the chromatin state.T he Y chromosome in Drosophila melanogaster is gene-poor, heterochromatic, and largely degenerate owing to the lack of recombination in males and the reduced effective population size of the Y (1-3). Beyond carrying a handful of factors essential for male fertility, the Y chromosome has been considered to have little function. Despite this relative lack of functional DNA, recent studies have shown that Y-linked genetic variation in Drosophila modulates the expression of hundreds of genes across the genome (4-6). Although it is presumed that this transacting transcriptional regulation is related to epigenetic modification of chromatin state by the Y chromosome, the functional basis for this effect has remained elusive (5).The D. melanogaster Y chromosome contains fewer than 20 single-copy coding genes (7-9), with the bulk of the chromosome composed of repetitive DNA. Among the best-studied Y-linked loci is the rDNA locus (designated bobbed), which physically accounts for ∼10% of the entire Y chromosome and is homologous to the X-linked rDNA locus. The rDNA locus in D. melanogaster is a tandemly repeated array consisting of hundreds of units, each of which encodes 18S, 5.8S, and 28S ribosomal RNA genes (Fig. 1A). In an rDNA cistron, many of the rDNA units cannot form functional ribosomes because of insertions of the site-specific retrotran...