Juvenile hormone (JH) is an important regulator of both insect development and reproductive maturation. Although the molecular mechanism of JH action is not yet known, there is growing circumstantial evidence that JH directly regulates gene expression. In the absence of a JH target gene, however, this suggestion has remained speculative. Cultured Drosophila S2 cells have been used to identify genes whose expression is regulated by JH. Employing differential display we identified several genes whose transcripts accumulate in cells treated with the JH agonist methoprene. Two of the genes-JhI-1 and JhI-26-were cloned and characterized in detail. For both genes, transcripts showed rapid and specific induction in the presence of either methoprene or JHIII, but not in the presence of other biologically inactive compounds of similar chemical structure. Accumulation of JhI-1 and JhI-26 RNAs requires continuous hormone presence. The developmental expression of the two JH-inducible genes corresponds to the abundance profile of JH in vivo. Furthermore, topical methoprene application to pupae leads to the ectopic accumulation of JhI-1 and JhI-26 transcripts.