The divergently transcribed yolk protein genes (Yp1 and Yp2) of Drosophila melanogaster are expressed only in adult females, in fat body tissue and in ovarian follicle cells. Using an in vitro transcription assay, we have identified a single 12-bp DNA element that activates transcription from the promoters of both Yp genes. In vivo, this regulatory element is tissue specific: it activates transcription of Yp1 and Yp2 reporter genes in follicle cells but has no detectable effect in fat body or other tissues. The sequence of the element consists of two recognition sites for the GATA family of transcription factors. We show that among the Drosophila genes known to encode GATA factors, only dGATAb is expressed in ovaries. The single transcript that we detect in ovaries is alternatively spliced or initiated to produce an ovary-specific isoform of the protein. Bacterially expressed dGATAb binds to the 12-bp element; a similar binding activity is also present in the Kc0 nuclear extracts used for in vitro transcription assays. These in vitro and in vivo results lead us to propose that dGATAb makes several developmentally regulated products, one of which is a follicle cell-specific protein activating transcription of Yp1 and Yp2 from a known regulatory element.