ABSTRACT Chromatin insulators are required for proper temporal and spatial expression of genes in metazoans. Insulators are thought to play an important role in the regulation of gene expression through the formation of higher-order chromatin structures. One of the best characterized insulators is the Drosophila gypsy insulator, which is located in the gypsy retrovirus. Several proteins are required for gypsy insulator function, including Su(Hw), Mod(mdg4), and CP190. In addition to the gypsy insulator, these proteins are located throughout the genome at sites which are thought to correspond to endogenous insulators. Analysis of the distribution of insulator proteins across a region of chromosome 2R in Drosophila polytene chromosomes shows that Su(Hw) is found in three structures differentially associated with insulator proteins: bands, interbands and domains of coexpressed genes. Bands are formed by condensation of chromatin within genes containing one or more Su(Hw) binding sites, while Su(Hw) sites in interbands appear to form structures normally associated with open chromatin. Bands characterized by the lack of CP190 and BEAF-32 insulator proteins are formed by clusters of coexpressed genes, and these bands correlate with the distribution of specific chromatin marks. Conservation of the band interband pattern, as well as the distribution of insulator proteins in nurse cells, suggests that this organization may represent the basic organization of interphasic chromosomes. We also show that, in addition to the gypsy insulator, sequence analysis predicts the presence of Su(Hw) binding sites within a number of transposable elements. Su(Hw) binds to predicted sites within gtwin and jockey, which possesses enhancer-blocking activity. Su(Hw) affects the tissue-specific expression of transposable elements, although this effect is unrelated to the presence of Su(Hw) binding sites within the element or control of the elements via the piRNA pathway. Additionally, the effect of Su(Hw) on transposable element expression often differs from that of Mod(mdg4). Taken together, these results suggest that insulator proteins associate specifically with, and may help to define, various levels of chromatin organization on polytene chromosomes. Also, gypsy insulator proteins may influence the expression of transposable elements in a way that does not depend on Su(Hw) binding sites within the elements themselves.

Chromatin insulators are short DNA sequences that, together with enhancers and silencers, orchestrate gene transcription through DNA-protein interactions in eukaryotic genomes. It has been proposed that insulators operate at the chromatin level by generating functionally independent higher-order chromatin domains. Insulators may maintain the integrity of such domains using two properties: blocking enhancer-promoter interactions and blocking heterochromatin spreading. The gypsy insulator of Drosophila was identified as a region of the gypsy retrovirus responsible for the production of tissue-specific mutations in many genes. The Suppressor of Hairy wing [Su(Hw)] protein contains 12 zinc fingers that specifically bind the gypsy insulator. Upon DNA binding, Su(Hw) recruits a second protein, Modifier of Mdg4 67.2 [Mod(mdg4) 67.2], and the interaction of both proteins is required for insulator function in vivo. We have found that three different arrays of gypsy retrovirus insertions in a yellow transgene result in unique yellow phenotypes, showing that the enhancer-blocking activity of the Drosophila gypsy insulators depends on the relative orientation of the gypsy retroviruses on the chromosome. We also observed from transgenic lines with gypsy retrovirus or insulator insertions that interaction of insulators may be regulated by active enhancers according to the relative positions of the insulators flanking the enhancers. Moreover, we show that gypsy insulators can positively modulate yellow activation and result in wild-type levels of expression when placed upstream of enhancers in yellow transgenes in which enhancers are placed out of context by &#;-DNA spacers and fail to reproduce the expression levels of yellow in wings and body cuticle. Our results provide evidence indicating that this phenomenon is independent of the boundary activity. Genetic analysis using mod(mdg4)67.2 mutant lines containing gypsy retrovirus insertions revealed that the gypsy insulator may be placed close to the yellow promoter region and be intimately involved in transcriptional activation and repression. Therefore, we suggest that insulators may also function by mediating long range interactions between enhancers and promoters.