In Drosophila and vertebrates, suppressor of fused (Su(fu)) proteins act as negative regulators of the Gli/Ci transcription factors, which mediate the transcriptional effects of Hh signalling.We sought for novel partners of Su(fu) in fly using the two-hybrid method. Most of the Su(fu) interactors thus identified are (or are likely to be) able to enter the nucleus. We focused on one of these putative partners, dMLF, which resembles vertebrate myelodysplasia/myeloid leukaemia factors 1 and 2. We demonstrate that dMLF binds specifically to Su(fu) in vitro and in vivo. Using a novel anti-dMLF antibody, we showed, that dMLF is a nuclear, chromosome-associated protein. We over-expressed a dMLF transgene in fly using an inducible expression system and showed that dMLF over-expression disrupts normal development, leading to either a lethal phenotype or adult structural defects associated with apoptosis and increased DNA synthesis. Furthermore, the dMLF-induced eye phenotype is enhanced by the loss of Su(fu) function, suggesting a genetic interaction between Su(fu) and dMLF.We propose that dSu(fu) and dMLF act together at the transcriptional level to coordinate patterning and proliferation during development.