A detailed analysis of the 5' end of the rudimentary gene of Drosophila melanogaster is presented. Rudimentary transcripts are heterogeneous at their 5' ends indicating that transcription is initiated at multiple sites within a region of approximately 50 bp. These transcription initiation sites are within a region that is preferentially susceptible to nuclease cleavage in isolated nuclei. Additional nuclease hypersensitive regions were found within the first exon and the first intron. Within these internal nuclease hypersensitive regions are the insertion sites for previously identified P element transposons which disrupt rudimentary expression. One of these P element insertions, located in the first intron, is removed from the rudimentary transcript with the splicing of this intron. Another P element insertion, within the first exon, is removed from the rudimentary transcript by novel first intron splicing involving a cryptic splice donor site, located 5' to the insertion, and either the normal acceptor site or a cryptic splice acceptor site within the second exon.