The untranslated leader region (ULR) of the Drosophila LTR retrotransposon copia is known to be critical to the element's expression in a variety of species. Two copia ULR size variants are prevalent in natural populations. The more transcriptionally active full length variants contain within their ULRs two tandemly repeated copies of a 28-bp region of dyad symmetry with a sequence similarity to the core sequence of the SV40 enhancer. The region of dyad symmetry contains two inverted repeats of a 8-bp motif (TTGTGAAA) that occurs at three additional locations within the ULR. The less active ULR gap variants differ from full length variants in that they contain only one copy of the 28-bp sequence. We show that the full length copia ULR in either orientation but not the gap ULR can significantly enhance expression of a minimal hsp 70 promoter. We demonstrate by EMSA that the full length ULR, the gap ULR and the 28-bp sequence are each capable of binding the Drosophila CCAAT/enhancer binding protein (DmC/EBP) and another previously uncharacterized factor, copia binding factor-1 (CBF-1). Another Drosophila protein previously implicated in fat body specific expression of the alcohol dehydrogenase gene (Adh), the Box-B-binding factor-2 (BBF-2), is also shown to bind to the copia ULR.