The Drosophila 87A7 heat shock locus is bordered, on the proximal and distal sides, by two special chromatin structures, scs and scs'. Each structure is characterized by two sets of nuclease-hypersensitive sites, located within moderately G/C-rich DNA, flanking an A/T-rich nuclease-resistant region. scs and scs' have been shown to insulate a white reporter gene from position effects and to prevent enhancer-promoter interactions. These and other properties suggest scs and scs' might function as chromatin domain boundaries. To identify the DNA sequences which are essential for the insulating activity of scs we used an enhancer blocking assay based on the white gene. Sequences capable of suppressing activation of white by its upstream enhancer elements reside within a 900 bp DNA fragment corresponding to the scs chromatin structure. Within this region, DNA fragments associated with the two nuclease-hypersensitive regions are essential for full enhancer blocking activity, while the central A/T-rich region is dispensable. Deletions which remove part of the hypersensitive regions result in intermediate levels of white activity. Insulating activity can, however, be reconstituted by multimerizing DNA fragments from either hypersensitive region. Our results suggest that the scs boundary is assembled from a discrete number of functionally redundant DNA sequences located within both hypersensitive regions and that boundaries act by decreasing the frequency of enhancer-promoter interactions. We also show that certain types of position effects, like those involved in dosage compensation, are not efficiently blocked by scs.