Production of large amounts of histone proteins during S phase is critical for proper chromatin formation and genome integrity. This process is achieved in part by the presence of multiple copies of replication dependent (RD) histone genes that occur in one or more clusters in metazoan genomes. In addition, RD histone gene clusters are associated with a specialized nuclear body, the histone locus body (HLB), which facilitates efficient transcription and 3' end-processing of RD histone mRNA. How all five RD histone genes within these clusters are coordinately regulated such that neither too few nor too many histones are produced, a process referred to as histone homeostasis, is not fully understood. Here, we explored the mechanisms of coordinate regulation between multiple RD histone loci in Drosophila melanogaster and Drosophila virilis. We provide evidence for functional competition between endogenous and ectopic transgenic histone arrays located at different chromosomal locations in D. melanogaster that helps maintain proper histone mRNA levels. Consistent with this model, in both species we found that individual histone gene arrays can independently assemble an HLB that results in active histone transcription. Our findings suggest a role for HLB assembly in coordinating RD histone gene expression to maintain histone homeostasis.