Drosophila melanogaster is one of the most well studied genetic model organisms; nonetheless, its genome still contains unannotated coding and non-coding genes, transcripts, exons and RNA editing sites. Full discovery and annotation are pre-requisites for understanding how the regulation of transcription, splicing and RNA editing directs the development of this complex organism. Here we used RNA-Seq, tiling microarrays and cDNA sequencing to explore the transcriptome in 30 distinct developmental stages. We identified 111,195 new elements, including thousands of genes, coding and non-coding transcripts, exons, splicing and editing events, and inferred protein isoforms that previously eluded discovery using established experimental, prediction and conservation-based approaches. These data substantially expand the number of known transcribed elements in the Drosophila genome and provide a high-resolution view of transcriptome dynamics throughout development. Three papers in this issue of Nature report on the modENCODE initiative, which aims to characterize functional DNA elements in the fruitfly Drosophila melanogaster and the roundworm Caenorhabditis elegans. Kharchenko et al. present a genome-wide chromatin landscape of the fruitfly, based on 18 histone modifications. They describe nine prevalent chromatin states. Integrating these analyses with other data types reveals individual characteristics of different genomic elements. Graveley et al. have used RNA-Seq, tiling microarrays and cDNA sequencing to explore the transcriptome in 30 distinct developmental stages of the fruitfly. Among the results are scores of new genes, coding and non-coding transcripts, as well as splicing and editing events. Finally, Nègre et al. have produced a map of the regulatory part of the fruitfly genome, defining a vast array of putative regulatory elements, such as enhancers, promoters, insulators and silencers. As part of the modENCODE initiative, which aims to characterize functional DNA elements in D. melanogaster and C. elegans, this study uses RNA-Seq, tiling microarrays and cDNA sequencing to explore the transcriptome in 30 distinct developmental stages of the fruitfly. Among the results are scores of new genes, coding and non-coding transcripts, as well as splicing and editing events.