The regulatory region of Drosophila melanogaster hsp26 includes a positioned nucleosome located between the two DNase I hypersensitive (DH) sites that encompass the critical heat shock elements (HSEs). To test the role of this nucleosome in regulated expression, transgenic flies containing hsp26-lacZ fusion genes with alterations in the nucleosome-associated region have been generated. The positioned nucleosome is associated with a DNA sequence that does not itself contain any critical regulatory elements for heat shock-inducible expression. The nucleosome-associated sequence can be deleted, reversed, duplicated or replaced by a random sequence with no significant effect on DH site formation and gene expression. Analyses of hsp26 and hsp70 transgenes with spacing changes within the promoter region indicate that the location of the (CT)n.(GA)n elements dictates the location of DH site formation. Wrapping the DNA between the regulatory elements around a nucleosome is as effective for gene expression as placing the regulatory elements close to each other. A loss of inducible gene expression was observed when the nucleosome-associated DNA was replaced with sequences which appear to misdirect nucleosome placement. The results indicate considerable flexibility in the spacing between DH regulatory sites.