The transcriptional regulation of the Drosophila melanogaster hsp27 (also called hsp28) gene was studied by introducing altered genes into the germ line by P element-mediated transformation. DNA sequences upstream of the gene were defined with respect to their effect on steroid hormone-induced and heat-induced transcription. These two types of control were found to be separable; the sequences responsible for 80% of heat-induced expression were located more than 1.1 kilobases upstream of the RNA initiation site, while the sequences responsible for the majority of ecdysterone induction were positioned downstream of the site at -227 base pairs. We have determined the DNA sequence of the intergenic region separating hsp23 and hsp27 and have located putative heat shock and ecdysterone consensus sequences. Our results indicate that the heat shock promoter of the hsp27 gene is organized quite differently from that of hsp7O.The expression of eucaryotic genes is regulated in a temporal, spatial, and quantitative fashion during the development of an organism. Discernment of the mechanisms underlying these different levels of control is essential for the understanding of the molecular basis of differentiation and the maintenance of the differentiated state. An important step in defining the mechanisms of gene regulation is the elucidation of the DNA sequences that are responsible for mediating the transcriptional activity of genes.Heat shock, the ubiquitous response of all organisms to a sublethal temperature elevation, has been studied extensively in both Drosophila melanogaster and Escherichia coli (see references 36 and 47 for a review) and constitutes an ideal model system in which to study the molecular basis of gene regulation in eucaryotes. In D. melanogaster, the response involves the abundant production of seven proteins, the heat shock proteins, within minutes of a temperature shift from the normal ambient growth temperature of 18 to 25°C to the elevated temperature level of 35 to 37°C. This response involves both the transcriptional activation of the genes encoding these proteins and the preferential translation of the corresponding mRNAs, while nearly all transcriptional and translational activity of non-heat shock genes is shut off. The molecular analysis of these genes has shown that they do not contain introns (with the exception of hsp83) and are clustered within five cytogenetic loci on chromosome 3. Although the biochemical function of the heat shock proteins remains obscure, it is known that they are vital for protection against heat and other potentially lethal physiological stresses. The recent advances in the understanding of the biochemistry of the bacterial heat shock genes, however, will undoubtedly shed light on the function of the eucaryotic heat shock genes as well (36).Subsets of the D. melanogaster heat shock genes have been shown to be expressed at high levels during specific stages of development, in the absence of a heat shock (28,55). hsp22, hsp23, hsp26, and hsp27 (also called hsp28) can ...