Evidence is presented demonstrating that mutations of zeste, particularly the null state, are strong recessive enhancers of position-effect variegation (PEV) for the white, roughest and Notch loci. The zeste locus encodes a DNA-binding protein that acts as a transcription factor and mediates transvection phenomena at several loci. Its involvement with these seemingly diverse phenomena suggests that the normal zeste product functions in the decondensation of chromatin. A model is presented proposing that zeste is important for opening and stabilizing domains of chromatin, a step in gene determination and the establishment of cell memory. It postulates that chromatin domains that have been structurally modified by chromosomal rearrangement or by insertion of transposable elements are particularly sensitive to the absence or modification of the zeste protein. Such a view unifies the role of zeste in transcription, transvection and PEV.