Mutations in the Saccharomyces cerevisiae SPT3 gene have dramatic effects on the expression of Ty elements and genes adjacent to the element. The SPT3 gene is essential for Ty transposition, because transposition of chromosomal Ty elements ceased when the SPT3 gene was replaced with the frameshift mutation spt3-101. Presumably, the elimination of transposition was due to the effect of the SPT3 gene product on Ty transcription; the transcripts of chromosomal Ty elements were largely abolished in the spt3-101 strain (F. Winston, K. J. Durbin, and G. R. Fink, Cell 39:675-682, 1984). Ty transcription in an spt3-101 strain could be reestablished by introduction of the pGTyH3 plasmid, in which transcription of the Ty element TyH3 is under the control of the GAL1 promoter; these plasmid-derived Ty transcripts were SPT3-independent. Ty transposition resumed after galactose induction in spt3-101 strains containing the pGTyH3 plasmid. In spt3 mutants nearly all of the resulting transposition events derived from pGTyH3 plasmids and not from chromosomal elements.