The Drosophila E74 gene is one of a small set of genes induced directly by the steroid hormone ecdysone at the onset of metamorphosis. Both in vitro and in vivo transcription assays have been used to delineate the promoter for the 6-kb E74 mRNA. Sequences upstream from position -83 had little effect on the amount of RNA synthesized in vitro, using extracts prepared from Drosophila Kc tissue culture cells. Deletion of a 5'-flanking TATA consensus sequence had no effect on the accuracy of transcriptional initiation and resulted in an increase in RNA synthesis, suggesting removal of a repressor binding site. Surprisingly, removal of the first two nucleotides of the transcribed region still allowed relatively high levels of transcription from the correct start site position. Removal of five additional nucleotides inactivated the promoter. In vitro transcription of a series of 3' deletions defined the 3' in vitro promoter boundary at position +43. Additional 5'-flanking sequences, between -181 and -83, were found to be necessary for efficient transcription in transfected Kc tissue culture cells. Two transcription factors that interact with the E74 promoter, zeste and GAGA, were studied in DNA-binding assays. zeste binds to two sites within the E74 promoter. These sites overlap with three of the six GAGA-binding sites. The zeste- and GAGA-binding sites lie within domains identified by deletion mapping as cis-acting transcriptional control elements.