Many loci in Drosophila exhibit dosage effects on single phenotypes. In the case of modifiers of position-effect variegation, increases and decreases in dosage can have opposite effects on variegating phenotypes. This is seemingly paradoxical: if each locus encodes a limiting gene product sensitive to dosage decreases, then increasing the dosage of any one should have no effect, because the others should remain limiting. An earlier model put forward to resolve this paradox suggested that dosage-dependent modifiers encode protein subunits of a macromolecular complex that is sensitive to mass action equilibrium conditions. Because chemical equilibria are dynamic, however, such hypothetical complexes will be unstable to an extent that is inconsistent with the known properties of molecules that make up chromatin. An alternative model accounts for the dosage effects in terms of interactions between structural proteins that bind at multiple linked sites. These might include indirect interactions occurring between regulatory proteins and genes for structural proteins or their protein products. The large number of direct and inverse regulatory genes which are known to exist in Drosophila could account for the apparent genetic complexity that is seen for modifiers of position-effect variegation and for other systems of phenotypic modification.