To investigate the mechanisms involved in expression of the Drosophila melanogaster engrailed gene, we purified GAGA protein, one of several putative transcriptional activator proteins that binds to the proximal region of the engrailed promoter. Antibodies raised against GAGA protein were used to demonstrate that the protein is present in all nuclei of young embryos. We isolated cDNA clones encoding GAGA protein in which a putative 519-codon open reading frame contains general sequence motifs characteristic of other transcription factors. These include stretches of polyglutamine, a 60-amino-acid region with 18 (30%) lysine or arginine residues, and a single putative zinc finger motif. In addition, a 120-residue N-terminal region shares significant sequence homology with several other known Drosophila transcription factors, including those encoded by Broad Complex and tramtrack. Up to 35-fold GAGA protein-dependent stimulation of transcription in Schneider line 2 tissue culture cells was observed after transfection of GAGA protein-encoding sequences. The GAGA gene is present in one copy in the Drosophila genome, at cytological location 70EF, and it encodes RNAs which vary in size between 2.4 and 4.4 kb.