ZAM, a new retroelement of Drosophila melanogaster, was identified as a mutational insertion at the white locus. It displays all the structural features of a vertebrate retrovirus. Its three open reading frames encode predicted products resembling the products of the gag, pol and env genes of retroviruses. Its transcription gives rise to an 8.6 kb full-length RNA and a 1.7 kb spliced message for the env gene. The latter encodes an envelope protein that is typical of elements having an extracellular phase of the life cycle. The identification of a ZAM envelope retrogene provides evidence that ZAM is mobilized through a reverse trancriptional process in the germ line of flies. We report that ZAM is distributed differently among D.melanogaster strains. Two stocks out of >15 tested display a ZAM high copy number, with numerous copies distributed on chromosomal arms. This high copy number is associated with a high transcriptional rate of ZAM. The existence of these two categories of strains offers a new genetic system in which the properties of a potential invertebrate retrovirus can be tested.