Historically, chromatin has been subdivided into heterochromatin, transcriptionally inactive regions that remain densely packaged throughout the cell cycle, and euchromatin, transcriptionally active regions that take on a diffuse appearance as the cell enters interphase. The banded portion of the small fourth chromosome (dot chromosome) of Drosophila melanogaster is unusual in exhibiting many characteristics of heterochromatic domains, and at the same time maintaining a gene density typical of euchromatin. Similar to genes embedded in pericentric heterochromatin, many of the dot chromosome genes have adapted to a heterochromatic environment. Little is known about the regulation of these genes and less about their evolution in a chromatin context. Interestingly, most of the genes from the D. melanogaster fourth chromosome remain clustered on a small chromosome throughout the genus Drosophila; yet the dot chromosome appears euchromatic in some species, such as D. virilis. Existing genomic sequence data allow an exploration of the underlying differences in DNA sequence organization between species. Here we review the available data describing the dot chromosome, which derives primarily from D. melanogaster. With its unusual and changing nature, the dot chromosome in the genus Drosophila provides a unique opportunity for the examination of transitions between chromatin states during evolution. © Springer 2006.