A series of yellow mutations associated with a great variety of tissue-specific phenotypes were obtained from several highly unstable Drosophila melanogaster strains carrying the gypsy-induced y2 allele. These mutations are caused by insertion of additional DNA sequences of variable size 69 bp upstream of the yellow transcription start site. These sequences are flanked by identical copies of a deleted 1.2-kb P element arranged in the same or inverted orientation. The central part of the inserted element consists of genomic sequences originating from different regions of the X chromosome. The mutant phenotype caused by these chimeric elements depends on the nature of the sequences present either in the P element or in the central part of the insertion, suggesting that these sequences are able to affect expression of the yellow gene. In addition, sequences present in the central region of the insertions strongly modify the effects of the gypsy-bound suppressor of Hairy-wing [su(Hw)] and modifier of mdg4 [mod(mdg4)] proteins on yellow transcription. Analyses of these mutations give new insights into the mechanisms by which su (Hw) and mod(mdg4) affect enhancer function.