The chromatin template activity of the polytene X chromosomal DNA was assayed by in situ transcription on the fixed polytene chromosomes using E. coli RNA polymerase holoenzyme and 3H-UTP as the monitoring substrate in various 1 X2A, 2 X2A and 3 X2A larvae and 1 X2A (+X fragments) segmental aneuploid larvae of Drosophila melanogaster. The segmental aneuploids contained duplications for the segments 15EF-20F, 11A-20F, 8C-20F and 3E-20F of the X chromosome. Results revealed that a double dose of active loci located in the X chromosome regions 15EF-20F, 11A-20F, and 8C-20F in aneuploids synthesized nearly 40%-70% more RNA than the normal single dose of this region in the wild-type males. The activity per gene dose for the two segments in the aneuploids was also significantly higher than in their male counterpart except for the duplication dp (3E-20F), where the duplicated piece extended from the centromeric heterochromatin to include 85% of the euchromatic portion of the X chromosome. In the case of dp (3E-20F), the X chromosome was transcribed at the lower, "female" level. It may also be noted that some regions of the X chromosome when present in extra copy, especially in dp (8C-20F) influenced the template activity of the X-linked genes inside or outside the duplicated segment. Metafemales (3 X2A) have 50% higher template activity of the X chromosomes than their diploid sisters. In this study, metafemales behaved as females with duplication. These results suggest that (1) dosage compensation involves changes in the template activity of the X chromosome and (2) the regulatory sequences involved in dosage compensation in Drosophila are located on the X chromosome and are polygenic. © 1985 Springer-Verlag.