E2F is a heterogenous transcription factor and its role in cell cycle control results from the integrated activities of many different E2F family members. Unlike mammalian cells, that have a large number of E2F-related genes, the Drosophila genome encodes just two E2F genes, de2f1 and de2f2. Here we show that de2f1 and de2f2 provide different elements of E2F regulation and that they have opposing functions during Drosophila development. dE2F1 and dE2F2 both heterodimerize with dDP and bind to the promoters of E2F-regulated genes in vivo. dE2F1 is a potent activator of transcription, and the loss of de2f1 results in the reduced expression of E2F-regulated genes. In contrast, dE2F2 represses the transcription of E2F reporters and the loss of de2f2 function results in increased and expanded patterns of gene expression. The loss of de2f1 function has previously been reported to compromise cell proliferation. de2f1 mutant embryos have reduced expression of E2F-regulated genes, low levels of DNA synthesis, and hatch to give slow-growing larvae. We find that these defects are due in large part to the unchecked activity of dE2F2, since they can be suppressed by mutation of de2f2. Examination of eye discs from de2f1; de2f2 double-mutant animals reveals that relatively normal patterns of DNA synthesis can occur in the absence of both E2F proteins. This study shows how repressor and activator E2Fs are used to pattern transcription and how the net effect of E2F on cell proliferation results from the interplay between two types of E2F complexes that have antagonistic functions.