Primary spermatocyte nuclei of Drosophila melanogaster exhibit three giant lampbrush-like loops formed by the kl-5, kl-3 and ks-1 Y chromosome fertility factors. Detailed mapping of satellite DNA sequences along the Y chromosome has recently shown that AA-GAC satellite repeats are a significant component of the kl-5 and ks-1 loop-forming regions. To determine whether these simple repeated sequences are transcribed on the loop structures we performed a series of DNA-RNA in situ hybridization experiments to fixed loop preparations using as a probe cloned AAGAC repeats. These experiments showed that the probe hybridizes with homologous transcripts specifically associated with the kl-5 and ks-1 loops. These transcripts are detected at all stages of development of these two loops, do not appear to migrate to the cytoplasm and are degraded when loops disintegrate during the first meiotic prophase. Moreover, an examination of the testes revealed that the transcription of the AAGAC sequences is restricted to the loops of primary spermatocytes; the other cell types of D. melanogaster spermatogenesis do not exhibit nuclear or cytoplasmic labeling. These experiments were confirmed by RNA blotting analysis which showed that transcription of the AAGAC sequences occurs in wild-type testes but not in X/O testes. The patterns of hybridization to the RNA blots indicated that the transcripts are highly heterogeneous in size, from large (migration at limiting mobility) to less than 1 kb. We discuss the possible function of the AAGAC satellite transcripts, in the light of the available information on the Y chromosome loops of D. melanogaster.