We describe the preparation and biochemical properties of a soluble nuclear fraction derived from Drosophila embryos. This extract, which can be easily prepared in 2.5 hr, is capable of accurate and efficient RNA polymerase II transcription of a variety of diverse genes from both Drosophila and mammals. With the relatively strong promoter of the Drosophila Krüppel gene, it is possible to achieve 20% template usage in a single round of transcription, which is considerably higher than the template usage of approximately 3% seen with standard nuclear extracts. Further, although U small nuclear RNA genes are refractory to transcription with HeLa transcription extracts, the soluble nuclear fraction transcribes a U1 small nuclear RNA gene from Drosophila. Moreover, transcriptional activation by sequence-specific activators can be attained in vitro with the soluble nuclear fraction. The overall transcriptional efficiency appears limited to 0.45 transcript per template of DNA per 30 min, but the mechanism of limitation is not known. The soluble nuclear fraction, which was developed to recreate the environment within the nucleus, should be useful when high efficiencies of RNA polymerase II transcription are desired.