The I factor, a transposable element related to mammalian LINEs, controls the I-R system of hybrid dysgenesis in Drosophila melanogaster. It transposes at high frequency in the germ-line of the female progeny of crosses between females of the reactive class of strains and males of the inducer class. The structure and DNA sequence of the I factor suggest that it transposes by reverse transcription of an RNA intermediate. Northern blot and S1 mapping experiments show that a full-length RNA of the I factor is synthesized specifically in the conditions of which I factors transpose. This RNA has all characteristics of a transposition intermediate. It is only found in the ovaries of dysgenic females suggesting that I factor activity is restricted to this tissue because of regulation at the level of the initiation of transcription or RNA stability.