The regulation of transcription of the class II yeast transposon Ty 1-17 has been examined using a Ty::LEU2 fusion gene. Deletion analysis has defined a 251 bp region within the coding sequence of the TY A gene which is essential for Ty transcription and is also required for diploid control of Ty expression. This downstream activator sequence (DAS) contains two sequence blocks which show homology to the SV40 enhancer core and three with homology to the diploid-regulation-site from the yeast MAT gene.