Compartmentalization of RNA biosynthetic factors into nuclear bodies (NBs) is a ubiquitous feature of eukaryotic cells. How NBs initially assemble and ultimately affect gene expression remains unresolved. The histone locus body (HLB) contains factors necessary for replication-coupled histone messenger RNA transcription and processing and associates with histone gene clusters. Using a transgenic assay for ectopic Drosophila HLB assembly, we show that a sequence located between, and transcription from, the divergently transcribed H3-H4 genes nucleates HLB formation and activates other histone genes in the histone gene cluster. In the absence of transcription from the H3-H4 promoter, “proto-HLBs” (containing only a subset of HLB components) form, and the adjacent histone H2a-H2b genes are not expressed. Proto-HLBs also transiently form in mutant embryos with the histone locus deleted. We conclude that HLB assembly occurs through a stepwise process involving stochastic interactions of individual components that localize to a specific sequence in the H3-H4 promoter. Display omitted ► The 297 nt bidirectional promoter of the histone H3-H4 genes nucleates HLB formation ► A combination of stochastic and ordered molecular interactions directs HLB assembly ► Transcription from H3-H4 induces HLB maturation and activates the other histone genes ► Histone 3′ end formation factors accumulate in the HLB independent of pre-mRNA signals Salzler et al. show that a sequence between Drosophila histone H3 and H4 genes, and its transcription, promotes histone locus body (HLB) assembly and histone gene activation. HLB component behavior in the absence of transcription suggests that stochastic molecular interactions and sequence-dependent stepwise component assembly contribute to HLB formation.