Enhancer-mediated promoter activation is a fundamental mechanism of gene regulation in eukaryotes (10, 44). Recently, sequences in different organisms have been identified that constrain enhancer action. These elements, known as insulators, block communication between an enhancer and promoter only when the insulator is positioned between these regulatory elements. Similarly, insulators prevent silencer interactions with promoters (6,10,30,44,45). The properties of insulators are exemplified by the gypsy insulator that originally was found in the gypsy transposable element (19,24).Genetic and molecular approaches have led to the identification and characterization of three proteins, Suppressor of Hairy wing [Su(Hw)], Mod(mdg4)-67.2, and CP190, that are required for the activity of the gypsy insulator (6, 36). Su(Hw) is a zinc finger protein that binds 12 directly repeated copies of a short sequence motif in the gypsy insulator (9, 42). In addition, Su(Hw) has two acidic domains located at the amino (N) and carboxyl (C) termini of the protein and a C-terminal enhancer-blocking region that is essential for insulation (23, 29). The mod(mdg4) gene, also known as E(var)3-93D, encodes a large set of protein isoforms with specific functions in regulating the chromatin structure of different genes (3). All isoforms encoded by mod(mdg4) contain a BTB/POZ domain and a glutamine-rich (Q) region in the N terminus (3, 7). The BTB (broad complex, tramtrack, bric-a-brac) or POZ (poxvirus and zinc finger) domain identifies a large family of proteins in organisms from yeast to humans (43,47). This domain functions as a protein interaction domain that facilitates homodimer (2, 33, 34) and heterodimer formation as well as oligomerization (11,28,37). One of the mod(mdg4)-encoded protein isoforms, Mod(mdg4)-67.2, interacts with the enhancer-blocking domain of the Su(Hw) protein (12, 20) through a C-terminal acidic domain. This domain is affected in two viable mutations mod(mdg4) u1 and mod(mdg4) T6 (12, 15). The third component of the insulator complex, CP190, also contains a BTB domain (38). It was suggested that Mod(mdg4)-67.2 and CP190 interact through their BTB domains.The mod(mdg4) u1 and mod(mdg4) T6 mutations have varying effects on insulator function, resulting in partial restoration of enhancer-promoter communication in some cases, while transforming the insulator into a silencer in others (4,12,13,14,15,22). The domains of the Mod(mdg4)-67.2 protein required for the insulator and antirepression activity are not determined. Although the essential role of the BTB domain for Mod-(mdg4)-67.2 activity was predicted in the previous studies, this postulate has not been proven (12,20). Here we examined the role of the BTB domain in the functional activities of the Mod(mdg4)-67.2 protein.The structure of the BTB domain has been examined for mammalian transcriptional repressors 34). The high degree of sequence identity between the BTB domains of Mod(mdg4), Bcl-6, and PZLF (1) allowed us to predict key residues of the Mod(mdg4)-67.2 ...