These are located 38 kb upstream from the structural gene. Additional wing and femur enhancers are found 83 and 120 kb upstream of the structural gene. One particular enhancer is responsible for cut activity at the wing margin, the boundary between dorsal and ventral wing compartments. When the gypsy retrotransposon of Drosophila inserts between an enhancer and a proximal promoter it prevents the enhancer from activating transcription. Chip may encode an enhancer-facilitator, acting to facilitate the activity of distal enhancers.
Chip is needed for the wing margin enhancer of cut .
The Chip mutation dominantly enhances the mutant phenotypes displayed by partially suppressed gypsy insertions in both cut and Ultrabithorax and is a homozygous larval lethal, indicating that Chip regulates multiple genes. Both Sc and Mam are known to regulate the cut distal enhancer, but in contrast to sd and mam mutants, Chip mutants display stronger genetic interactions with gypsy insertions than with wing margin enhancer deletions. Thus, in a heterozygous Chip mutant, a heterozygous gypsy insertion in cut displays a cut wing phenotype, whereas a heterozygous enhancer deletion does not. Dependence on the nature of the heterozygous lesion in the regulatory region strongly suggests that Chip directly regulates cut . More strikingly, it indicates that in a Chip heterozygote, a gypsy insertion is more deleterious to enhancer function than deletion of the enhancer.