Transcription activation causes dramatic changes in a gene's compaction and macromolecular associations and, in some cases, triggers the translocation of the gene to a nuclear substructure. Here, we evaluate the location, movement, and transcriptional dynamics of Drosophila heat shock (HS) genes both by two-photon microscopy in live polytene nuclei and by FISH in diploid nuclei. The different HS loci occupy separate nuclear positions. Although these loci decondense upon HS, they do not undergo a detectable net translocation nor are they preferentially localized to the nuclear periphery or interior. Additionally, fluorescence recovery after photobleaching reveals that, shortly after HS, newly recruited RNA polymerase II (Pol II) enters elongation via an "efficient entry" mode, which is followed by the progressive establishment of transcription "compartments" at Hsp70 loci where concentrated Pol II is used in a "local recycling" mode. Pol II at highly transcribed developmental loci exhibits dynamics resembling combinations of these Hsp70 transcription modes.