Polycomb group (PcG) genes of Drosophila are negative regulators of homeotic gene expression required for maintenance of determination. Sequence similarity between Polycomb and Su(var)205 led to the suggestion that PcG genes and modifiers of position-effect variegation (PEV) might function analogously in the establishment of chromatin structure. If PcG proteins participate directly in the same process that leads to PEV, PcG mutations should suppress PEV. We show that mutations in E(Pc), an unusual member of the PcG, suppress PEV of four variegating rearrangements: In(l)wm4, B(SV), T(2;3)Sb(V) and In(2R)bw(VDe2). Using reversion of a Pelement insertion, deficiency mapping, and recombination mapping as criteria, homeotic effects and suppression of PEV associated with E(Pc) co-map. Asx is an enhancer of PEV, whereas nine other PcG loci do not affect PEV. These results support the conclusion that there are fewer similarities between PcG genes and modifiers of PEV than previously supposed. However, E(Pc) appears to be an important link between the two groups. We discuss why Asx might act as an enhancer of PEV.