DNA from the scarlet (st) region of Drosophila melanogaster has been cloned by chromosome walking, using the breakpoints of a new X-ray-induced third chromosome inversion (In(3LR)st-a27) which breaks in the scarlet (73A3.4) and rosy (87D13-14) regions. Two spontaneous mutants of st(st1 and stsp) contain insertions of non-st DNA located within 3.0 kb of the site of the inversion breakpoint used to isolate the gene, and a second scarlet inversion breaks within 6.5 kb of this site. However no changes detectable by Southern blotting were found in 5 X-ray-induced st mutants with cytologically normal third chromosomes. A 2.3-kb transcript arising from the st gene region (as defined by mutant analysis and DNA transformation) has been detected. This transcript is present throughout development at low levels, with a peak level during the early to mid-pupal stage. The size and amount of this transcript is altered in st1, and its amount is drastically reduced in stsp. Flies carrying the white1 mutation show normal levels of expression of the st transcript, suggesting that the w+ gene does not regulate transcription of the st+ gene. Nucleotide homology between sequences from the st transcription unit and a fragment carrying coding information from the white gene has been detected. This suggests that the st and w proteins are related; they appear to belong to a family of membrane-spanning, ATP-binding proteins involved in the transport of pigment precursors into cells.