Dosage compensation is a regulatory process that insures that males and females have equal amounts of X-chromosome gene products. In Drosophila, this is achieved by a 2-fold enhancement of X-linked gene transcription in males, relative to females. The enhancement of transcription is mediated by the activity of a group of regulatory genes characterized by the male-specific lethality of their loss-of-function alleles. The products of these genes form a complex that is preferentially associated with numerous sites on the X chromosome in somatic cells of males but not of females. Binding of the dosage compensation complex is correlated with a significant increase in the presence of a specific histone isoform, histone 4 acetylated at Lys16, on this chromosome. Experimental results and sequence analysis suggest that an additional gene, males-absent on the first (mof), encodes a putative acetyl transferase that plays a direct role in the specific histone acetylation associated with dosage compensation. The predicted amino acid sequence of MOF exhibits a significant level of similarity to several other proteins, including the human HIV-1 Tat interactive protein Tip60, the human monocytic leukemia zinc finger protein MOZ and the yeast silencing proteins SAS3 and SAS2.