Chromosomal rearrangements that juxtapose heterochromatin and euchromatin can result in mosaic inactivation of heterochromatic and euchromatic genes. This phenomenon, position effect variegation (PEV), suggests that heterochromatic and euchromatic genes differ in their regulatory requirements. This report describes a novel method for mapping regions required for heterochromatic genes, and those that induce PEV of a euchromatic gene. P transposase mutagenesis was used to generate derivatives of a translocation that variegated for the light+ (lt+) gene and carried the euchromatic white+ (w+) gene on a transposon near the heterochromatin-euchromatin junction. Cytogenetic and genetic analyses of the derivatives showed that P mutagenesis resulted in deletions of several megabases of heterochromatin. Genetic and molecular studies showed that the derivatives shared a euchromatic breakpoint but differed in their heterochromatic breakpoint and their effects on seven heterochromatic genes and the w+ gene. Heterochromatic genes differed in their response to deletions. The lt+ gene was sensitive to the amount of heterochromatin at the breakpoint but the heterochromatic 40Fa gene was not. The severity of variegated w+ phenotype did not depend on the amount of heterochromatin in cis, but varied with local heterochromatic environment. These data are relevant for considering mechanisms of PEV of both heterochromatic and euchromatic genes.