Insulator DNAs and promoter competition regulate enhancer-promoter interactions within complex genetic loci. A transgenic embryo assay was used to obtain evidence that the Drosophila eve promoter possesses an insulator activity that can be uncoupled from the core elements that mediate competition. The eve promoter contains an optimal TATA element and a GAGA sequence. The analysis of various chimeric promoters provides evidence that TATA is essential for promoter competition, whereas GAGA mediates enhancer blocking. The Trithorax-like (Trl) protein interacts with GAGA, and mutations in trl attenuate eve promoter insulator activity. We suggest that Trl-GAGA increases the stability of enhancer-promoter interactions by creating an open chromatin configuration at the core promoter.