Transvection is a phenomenon wherein gene expression is effected by the interaction of alleles in trans and often results in partial complementation between mutant alleles. Transvection is dependent upon somatic pairing between homologous chromosome regions and is a form of interallelic complementation that does not occur at the polypeptide level. In this study we demonstrated that transvection could occur at the vestigial (vg) locus by revealing that partial complementation between two vg mutant alleles could be disrupted by changing the genomic location of the alleles through chromosome rearrangement. If chromosome rearrangements affect transvection by disrupting somatic pairing, then combining chromosome rearrangements that restore somatic pairing should restore transvection. We were able to restore partial complementation in numerous rearrangement trans-heterozygotes, thus providing substantial evidence that the observed complementation at vg results from a transvection effect. Cytological analyses revealed this transvection effect to have a large proximal critical region, a feature common to other transvection effects. In the Drosophila interphase nucleus, paired chromosome arms are separated into distinct, nonoverlapping domains. We propose that if the relative position of each arm in the nucleus is determined by the centromere as a relic of chromosome positions after the last mitotic division, then a locus will be displaced to a different territory of the interphase nucleus relative to its nonrearranged homolog by any rearrangement that links that locus to a different centromere. This physical displacement in the nucleus hinders transvection by disrupting the somatic pairing of homologous chromosomes and gives rise to proximal critical regions.