We investigated whether single P element insertional mutagenesis could be used to analyze heterochromatin within the Drosophila minichromosome Dp1187. Forty-five insertions of the P[lacZ,rosy+] element onto Dp1187 (recovered among 7,825 transpositions) were highly clustered. None was recovered in centromeric heterochromatin, but 39 occurred about 40 kb from the distal telomere within a 4.7-kb hotspot containing tandem copies of a novel 1.8-kb repetitive DNA sequence. The DNA within and distal to this region lacked essential genes and displayed several other properties characteristic of heterochromatin. The rosy+ genes within the inserted transposons were inhibited by position-effect variegation, and the subtelomeric region was underrepresented in polytene salivary gland cells. These experiments demonstrated that P elements preferentially transpose into a small subset of heterochromatic sites, providing a versatile method for studying the structure and function of these chromosome regions. This approach revealed that a Drosophila chromosome contains a large region of subtelomeric heterochromatin with specific structural and genetic properties.