Analysis of the whitezeste mottled (wzm) mutant family suggests that the zeste gene product functions in establishing and stabilizing a transcriptionally active chromatin domain for white locus expression. The z1 mutation reduces expression of paired or proximate copies of white, while single or unpaired copies maintain wild-type levels of expression. The wzm mutation, caused by the insertion of the retrotransposon BEL into the 5' intron of white, alters the zeste-white interaction to produce a mottled eye phenotype in hemizygous z1 wzm males. We have determined the molecular structure of four wzm derivatives. wzl results from the insertion of an additional transposable element into the 5' regulatory region of white. wzvl is a deletion of sequences upstream of the white locus. Two others, whalo and wcres, result from the transposition of wzm plus the entire verticals-roughest region into heterochromatin near the tip of chromosome 3L. They variegate for roughest but not for white; rather, the z1 effect on wzm now causes white expression to become non-autonomous and non-clonal. The analysis of these five mutations shows that the neomorphic zeste1 product, in combination with structural changes imposed by transposons and intercalary heterochromatin, modifies the determination and stability of white expression. We propose that the normal zeste product functions as part of a complex that stimulates transcription by changing chromatin conformation to establish and maintain transcriptionally active domains. The unpairing of homologs is proposed to be one of the initial results of conformational change, providing an explanation for the role of zeste in transvection.