The role of the TATA element in establishing the chromatin structure and inducible transcription of the Drosophila melanogaster hsp26 gene has been analyzed. An hsp26/lacZ fusion gene with a mutant promoter, in which the TATA box sequence TATAAA was changed to CCCAAA, was introduced into Drosophila by P-element transformation. The mutation had little effect on formation of the preset chromatin structure observed prior to induction. However, the mutation dramatically reduced transcription levels following heat shock. Northern analysis indicated that weak, inducible expression of the mutant promoter occurred within the same period of heat shock as for the normal promoter, suggesting that TFIID was associated with the mutant promoter prior to heat shock. Biochemical analysis showed that the mutant promoter still bound TFIID in vitro, but with 3-5-fold less affinity than the normal promoter. DNase I footprinting revealed that the conformation of the TFIID-DNA complex differed significantly from that of the normal promoter. These results indicate that alterations in the conformation or the stability of the TFIID-DNA complex drastically reduce the level of induction, but do not dramatically affect chromatin structure formation. Formation of the requisite chromatin structure is either independent of, or highly tolerant of, changes in the TFIID-DNA complex.