Reverse transcription intermediate forms (minus and plus strong-stop DNA) are detected in Drosophila melanogaster cultured cells for mobile dispersed genetic elements mdg1, mdg3, and mdg4 (gypsy). The mdg elements studied possess a common mechanism of reverse transcription, despite their structural differences, and the comparative analysis of intermediate forms proves that mdg elements pass the same stages of reverse transcription as retroviruses. The length of minus strong-stop DNA that locates the RNA start site coincides with the data obtained from S1 nuclease analysis of transcription initiation. S1 analysis has also revealed that mdg LTRs have a U3-R-U5 structure analogous to that of retroviral LTRs. Transcription of mdg1, mdg3, and mdg4 is initiated within or immediately after the same sequence TCAGTPy. Neither the TATA box nor the CAAT box can be found at their characteristic positions upstream of the 5' ends of mRNAs.