The vestigial (vg) gene of Drosophila melanogaster encodes a nuclear protein which plays a key role in wing formation but is also involved in other developmental processes. We have previously shown that depletion of the dTMP pool by aminopterin, an inhibitor of the enzyme dihydrofolate reductase, or by fluorodeoxyuridine, an inhibitor of thymidylate synthetase, induces nicks in the wings of wild-type flies and a strong vg phenotype in vgBG/+ flies and also in individuals heterozygous for a deficiency of the vg locus (vgB/+). Furthermore, specific alterations of the vg locus, caused by intronic insertions, are associated with resistance to these drugs. In this paper, we show that: (1) depletion of the dTMP pool by aminopterin leads to a decrease in the amount of vg transcripts; (2) insertion of the retrotransposon 412 in the vgBG mutant, which is resistant to aminopterin, leads to the formation of a truncated transcript that is prematurely terminated in the long terminal repeat of this transposable element; and (3) aminopterin also affects the level of this truncated transcript. These results indicate that alterations of the wing by inhibitors of dTMP synthesis are caused by an effect of these drugs on levels of vg transcripts; the resistance to such agents observed for the vgBG strain is not due to a qualitatively different effect of this drug on the vg transcript but, rather, is related to the expression of a modified Vg protein encoded by a truncated transcript. These results are compatible with a role for vestigial in modulating cell proliferation.