Telomeres are generally considered heterochromatic. On the basis of DNA composition, the telomeric region of Drosophila melanogaster contains two distinct subdomains: a subtelomeric region of repetitive DNA, termed TAS, and a terminal array of retrotransposons, which perform the elongation function instead of telomerase. We have identified several P-element insertions into this retrotransposon array and compared expression levels of transgenes with similar integrations into TAS and euchromatic regions. In contrast to insertions in TAS, which are silenced, reporter genes in the terminal HeT-A, TAHRE, or TART retroelements did not exhibit repressed expression in comparison with the same transgene construct in euchromatin. These data, in combination with cytological studies, provide evidence that the subtelomeric TAS region exhibits features resembling heterochromatin, while the terminal retrotransposon array exhibits euchromatic characteristics. D NA sequences at the ends of eukaryotic chromosomes are the products of a telomere elongation process. In most eukaryotes, these sequences are simple repeating units that are synthesized by telomerase, but in Drosophila melanogaster they are tandem head-to-tail arrays of three non-long terminal repeat retrotransposons, HeT-A, TAHRE, and TART ( Despite these differences, a common feature of eukaryotic chromosomes is a region of complex repeats located adjacent to the terminal sequences. These complex repeats are referred to as subtelomeric regions, or telomere-associated sequences (TAS), and differ in sequence, structure, and length among species and among telomeres within an individual (Pryde et al. 1997). The repetitive nature and the high density of transposable elements in these subtelomeric regions (Mefford and Trask 2002) are reminiscent of heterochromatin. In D. melanogaster, TAS consist of several kilobases of complex repeats, which exhibit similarities between the different chromosome ends. Sequences of the 2L and X TAS regions have been described in detail (Karpen and Spradling 1992;Walter et al. 1995), and in situ hybridizations to polytene chromosomes showed that 2L TAS share homology with 3L TAS, while X TAS share homology with 2R and 3R TAS. The 2L TAS appear to be 15 kb in length and composed of relatively simple