Specific binding of the insect steroid hormone 20-hydroxyecdysone to imaginal discs of Drosophila melanogaster has been investigated. Evidence is presented showing that most of the specific binding is located in the nuclear fraction at the time changes in gene function are observed. Nuclear binding is high affinity, analog specific, apparently saturable, and unaffected by inhibitors of RNA and protein synthesis. The association kinetics of nuclear binding are very similar to those of specific binding in whole cells. Specific binding to whole discs and to disc nuclei is temperature-dependent, but equal levels of nuclear binding are achieved after 1 h at 25 degrees C and 8 h at 0-4 degrees C. There is little or no lag in the nuclear location of specific binding at either temperature. The biochemical properties of the specific nuclear binding are consistent with the involvement of these sites in the hormone detection and response system mediating imaginal disc morphogenesis.