Transformant complementation, intragenic deletions and Northern blot analyses provide unambiguous localization of the l(3)S12 gene immediately proximal to the 5' end of the rosy locus. We have characterized an array of transformants with respect to l(3)S12 and rosy expression. The l(3)S12 gene is exceedingly sensitive to euchromatic site-specific position effects. Unlike the rosy locus, l(3)S12 is insensitive to heterochromatic position effect in rearrangements, as well as in a transformant located in heterochromatin. Cotransformants for both l(3)S12 and rosy elicit no apparent pattern of concordance with respect to euchromatic site-specific position effects. Heterochromatic-euchromatic rearrangements are examined with respect to position effects on expression of the rosy region genes l(3)12, rosy, snake and piccolo, as well as suppressor effects. Clear distinction is seen between euchromatic and heterochromatic effects.