Previous analysis of the hsp26 gene of Drosophila melanogaster has shown that in 
addition to the TATA box and the proximal and distal heat shock elements (HSEs) 
(centered at -59 and -340, relative to the start site of transcription), a 
segment of (CT)n repeats at -135 to -85 is required for full heat shock 
inducibility (R.L. Glaser, G.H. Thomas, E.S. Siegfried, S.C.R. Elgin, and J.T. 
Lis, J. Mol. Biol. 211:751-761, 1990). This (CT)n element appears to contribute 
to formation of the wild-type chromatin structure of hsp26, an organized 
nucleosome array that leaves the HSEs in nucleosome-free, DNase I-hypersensitive 
(DH) sites (Q. Lu, L.L. Wallrath, B.D. Allan, R.L. Glaser, J.T. Lis, and S.C.R. 
Elgin, J. Mol. Biol. 225:985-998, 1992). Inspection of the sequences upstream of 
hsp26 has revealed an additional (CT)n element at -347 to -341, adjacent to the 
distal HSE. We have analyzed the contribution of this distal (CT)n element (-347 
to -341), the proximal (CT)n element (-135 to -85), and the two HSEs both to the 
formation of the chromatin structure and to heat shock inducibility. hsp26 
constructs containing site-directed mutations, deletions, substitutions, or 
rearrangements of these sequence elements have been fused in frame to the 
Escherichia coli lacZ gene and reintroduced into the D. melanogaster genome by 
P-element-mediated germ line transformation. Chromatin structure of the 
transgenes was analyzed (prior to gene activation) by DNase I or restriction 
enzyme treatment of isolated nuclei, and heat-inducible expression was monitored 
by measuring beta-galactosidase activity. The results indicate that mutations, 
deletions, or substitutions of either the distal or the proximal (CT)n element 
affect the chromatin structure and heat-inducible expression of the transgenes. 
These (CT)n repeats are associated with a nonhistone protein(s) in vivo and are 
bound by a purified Drosophila protein, the GAGA factor, in vitro. In contrast, 
the HSEs are required for heat-inducible expression but play only a minor role 
in establishing the chromatin structure of the transgenes. Previous analysis 
indicates that prior to heat shock, these HSEs appear to be free of protein. Our 
results suggest that GAGA factor, an abundant protein factor required for normal 
expression of many Drosophila genes, and heat shock factor, a specific 
transcription factor activated upon heat shock, play distinct roles in gene 
regulation: the GAGA factor establishes and/or maintains the DH sites prior to 
heat shock induction, while the activated heat shock factor recognizes and binds 
HSEs located within the DH sites to trigger transcription.