Eukaryotic chromosomes are thought to be subdivided into a series of structurally and functionally independent units. Critical to this hypothesis is the identification of insulator or boundary elements that delimit chromosomal domains. The properties of a Notch mutation, facet-strawberry (fa(swb)), suggest that this small deletion disrupts such a boundary element. fa(swb) is located in the interband separating polytene band 3C7, which contains Notch, from the distal band 3C6. The fa(swb) mutation alters the structural organization of the chromosome by deleting the interband and fusing 3C7 with 3C6. Genetic studies also suggest that fa(swb) compromises the functional autonomy of Notch by allowing the locus to become sensitive to chromosomal position effects emanating from distal sequences. In the studies reported here, we show that a DNA fragment spanning the fa(swb) region can insulate reporter transgenes against chromosomal position effects and can block enhancer-promoter interactions. Moreover, we find that insulating activity is dependent on sequences deleted in fa(swb). These results provide evidence that the element defined by the fa(swb) mutation corresponds to an insulator.