A full-length copy of the retrotransposon GATE was identified as an insertion in the tandemly repeated, heterochromatic, Stellate genes, which are expressed in the testis of Drosophila melanogaster. Sequencing of this heterochromatic GATE copy revealed that it is closely related to the BEL retrotransposon, a representative of the recently defined BEL-like group of LTR retrotransposons. This copy contains identical LTRs, indicating that the insertion is a recent event. By contrast, the euchromatic part of the D. melanogaster genome contains only profoundly damaged GATE copies or fragments of the transposon. The preferential localization of GATE sequences in heterochromatin was confirmed for the other species in the melanogaster subgroup. The level of GATE expression is dramatically increased in ovaries, but not in testes, of spn-E(1) homozygous flies. We speculate that spn-E is involved in the silencing of GATE via an RNA interference mechanism.