The homeless (hls) gene of Drosophila is required for anteroposterior and dorsoventral axis formation during oogenesis. At a low frequency, females homozygous for mutations in hls generate early egg chambers in which the oocyte is positioned incorrectly within the cyst. At a high frequency, late-stage egg chambers exhibit a ventralized chorion. Sequence analysis of the hls cDNA predicts a protein with amino-terminal homology to members of the DE-H family of RNA-dependent ATPases and putative helicases. Similarity of 51% in the amino-terminal third of the protein was found to two yeast splicing factors, PRP2 and PRP16, and to Drosophila Maleless, which is required for dosage compensation. To analyze Hls function, RNA localization patterns were determined for seven different transcripts in hls mutant ovaries. Previtellogenic transport to the oocyte was unaffected for all transcripts examined. Transport and localization of bicoid and oskar messages during vitellogenic stages were strongly disrupted, and the distribution and/or quantity of gurken, orb, and fs(1)K10 mRNAs were also affected, but to a lesser degree. In contrast, hu-li tai shao and Bicaudal-D transcripts were transported and localized normally in hls mutants. In addition, Kinesin heavy chain:beta-Galactosidase fusion protein failed to localize correctly to the posterior of the oocyte in vitellogenic egg chambers. Examination of the microtubule structure with anti-alpha-Tubulin antibodies revealed aberrant microtubule organizing center movement and an abnormally dense cytoplasmic microtubule meshwork. We discuss potential roles for Hls in organizing a cytoskeletal framework essential for localizing specific RNAs.