This report describes cytological, genetic and biochemical studies designed to characterize two γ-radiation induced, apparent "underproducer" variants of the rosy locus (ry:3-52.0), ryps1149 and ryps11136. The following observations provide a compelling basis for their diagnosis as heterochromatic position effect variants. (1) They are associated with rearrangements that place heterochromatin adjacent to the rosy region of chromosome 3 (87D). (2) The effect of these mutations on rosy locus expression is subject to modification by abnormal Y chromosome content. (3) The rearrangement alters only the expression of the rosy allele on the same chromosome (cis-acting). (4) The Y chromosome modification is only on the position-affected allele's expression. (5) The recessive lethality associated with the rearrangements relate to specific rosy region vital loci, and for ryps 11136, the lethality is not Y chromosome modified. (6) The peptide product of the position-affected allele is qualitatively normal by several criteria. (7) Heterozygous deletion of 87E2-F2 is a suppressor of the rosy position effect. (8) The rosy position effect on XDH production may be assayed in whole larvae and larval fat body tissue as well as in adults.