Abstract The classical phenomenon of position-effect variegation (PEV) is the mosaic expression that occurs when a chromosomal rearrangement moves a euchromatic gene near heterochromatin. A striking feature of this phenomenon is that genes far away from the junction with heterochromatin can be affected, as if the heterochromatic state “spreads.” We have investigated classical PEV of a Drosophila brown transgene affected by a heterochromatic junction ~60 kb away. PEV was enhanced when the transgene was locally duplicated using P transposase. Successive rounds of P transposase mutagenesis and phenotypic selection produced a series of PEV alleles with differences in phenotype that depended on transgene copy number and orientation. As for other examples of classical PEV, nearby heterochromatin was required for gene silencing. Modifications of classical PEV by alterations at a single site are unexpected, and these observations contradict models for spreading that invoke propagation of heterochromatin along the chromosome. Rather, our results support a model in which local alterations affect the affinity of a gene region for nearby heterochromatin via homology-based pairing, suggesting an alternative explanation for this 65-year-old phenomenon.