dMi-2, the ATPase subunit of the Drosophila nucleosome remodelling and histone deacetylation (dNuRD) complex, was identified in a two-hybrid screen as an interacting partner of the transcriptional repressor, Tramtrack69 (Ttk69). A short region of Ttk69 is sufficient to mediate this interaction. Ttk69, but not the Ttk88 isoform, co-purifies with the dNuRD complex isolated from embryo extracts. dMi-2 and Ttk69 co-immunoprecipitate from embryonic extracts, indicating that they can associate in vivo. Both dMi-2 and Ttk69 co-localize at a number of discrete sites on polytene chromosomes, showing that they bind common target loci. We also demonstrate that dMi-2 and Ttk interact genetically, indicating a functional interaction in vivo. We propose that Ttk69 represses some target genes by remodelling chromatin structure through the recruitment of the dNuRD complex.