In Drosophila melanogaster, position-effect variegation of the white gene has been a useful phenomenon by which to study chromosome structure and the genes that modify it. We have identified a new enhancer of variegation locus, Dmrnahel (hel). Deletion of mutation of hel enhances white variegation, and this can be reversed by a transformed copy of hel+. In the presence of two endogenous copies, the transformed hel+ behaves as a suppressor of variegation. hel is an essential gene and functions both maternally and zygotically. The HEL protein is similar to known RNA helicases, but contains an unusual variant (DECD) of the DEAD motif common to these proteins. Potential HEL homologues have been found in mammals, yeast and worms. HEL protein associates with salivary gland chromosomes and locates to nuclei of embryos and ovaries, but disappears in mitotic domains of embryos as chromosomes condense. We propose that the HEL protein promotes an open chromatin structure that favors transcription during development by regulating the spread of heterochromatin, and that HEL is regulated by, and may have a role in, the mitotic cell cycle during embryogenesis.