The interaction of DNA topoisomerase II with the long terminal repeat (LTR) of the Drosophila melanogaster 1731 retrotransposon was studied. The covalent binding of topoisomerase II to the LTR was strongly stimulated by different inhibitors of the enzyme 4′-demethylepipodophyllotoxin-9-(4,6-O-2-ethylidene-β->-glucopyranoside (VP-16), 4′-(9-acridinylamino)methanesulfon-m-anisidine) (m-AMSA) and an ellipticine derivative. Enzyme-mediated DNA cleavage could be observed in the absence of inhibitors and was stimulated in their presence. Cleavage occurred predominantly at sites located within or at the boundary of alternating purine/pyrimidine tracts in agreement with previous observations [Spitzner, J. R., Chung, I. K. & Muller, M. T. (1990) Eukaryotic topoisomerase II preferentially cleaves alternating purine-pyrimidine repeats, Nucleic Acids Res. 18, 1–11]. In addition, all of the cleavage sites observed in the absence of inhibitor were located in the U3 region of the LTR. The site specificity of drug-induced cleavage was studied and the conformity of the cleavage sites with previously established consensus sequences was examined. Our results suggest that DNA topoisomerase II, through its ability to alter the degree of DNA supercoiling, might be involved in the control of different functions of the LTR.