The Agr gene of Drosophila melanogaster was localized to the X chromosome 12F region between the Netrin B and rutabaga genes. A P1 clone containing this area was identified, and restriction sites within this clone were mapped. The entire Agr gene and some flanking region were sequenced, and the transcription start site was determined. The gene was 938 bp in length and included a 108 bp intron, dividing the coding region into a 140 bp 5' exon and a 690 bp 3' exon. The 5' untranslated region (UTR) was 23 bp in length and the 3' UTR 36 bp. Gene expression was initiated during late embryogenesis and was also observed during the larval, prepupal, and adult stages. Expression was found only in the outer layer of the proventriculus, a structure located at the fore- and midgut junction. Deletion of the Agr gene had no effect on proventricular morphogenesis in embryos. The Agr expression pattern within the proventriculus suggests that it encodes a component of the peritrophic matrix, a tubular envelope produced by the proventriculus and which lines the midgut. Sequences similar to the Agr coding region were detected in other dipteran species. suggesting that the function of the Agr gene product is conserved.