Extensive analysis of cDNAs from the para locus in D. melanogaster reveals posttranscriptional modifications indicative of adenosine-to-inosine RNA editing. Most of these edits occur in highly conserved regions of the Na+ channel, and they occur in distant relatives of D. melanogaster as well. Sequence comparison between species has identified putative cis-acting elements important for each RNA editing site. Double-stranded RNA secondary structures with striking similarity to known RNA editing sites were generated based on these data. In addition, the RNA editing sites appear to be developmentally regulated. We have cloned a potential RNA editase, DRED, with a high degree of homology to the mammalian RED1,2 genes. The DRED locus itself is highly regulated by transcription from alternative promoters and alternative splicings.