The telomeric regions in Drosophila cause transcriptional silencing of integrated transgenes. A complex satellite has recently been identified in the subterminal region of the left arm of chromosome 2 that is a good candidate for the source of the observed telomeric silencing, because genetically marked transposable elements that have inserted into this subtelomeric array show repression and variegation of the reporter gene. We asked whether this satellite can also cause transcriptional repression in ectopic chromosomal positions by placing it upstream of a mini-white reporter gene in P element constructs used for germ line transformation. The transgenes are shielded from external influences at the integration site using SU(HW) binding sites at either end. It was found that the satellite represses transcription of the reporter gene in an orientation dependent and an array length dependent manner. The satellite does not, however, induce variegation under the conditions used. The repressed transgenes do not respond to typical modifiers of centromeric position effect variegation, such as Su(var)2055, Su(var)2-11, Su(var)3-11, and Su(var)3-61, or to the addition of a Y chromosome. However, as with the original variegating telomeric insertion, suppression in the transgenes is relieved by Su(z)25, suggesting that suppression induced by the subtelomeric satellite retains aspects of telomeric silencing in ectopic positions.