Epigenetic maintenance of the expression state of the genome is critical for development. Drosophila GAGA factor interacts with FACT and modulates chromatin structure for the maintenance of gene expression. Here we show that the GAGA factor-FACT complex and its binding site just downstream from the white gene are crucial for position effect variegation. Interestingly there is a dip of histone H3 Lys 9 methylation and a peak of H3 Lys 4 methylation at this site. The GAGA factor and FACT direct replacement of histone H3 by H3.3 through association of HIRA at this site, and maintain white expression under the heterochromatin environment. Based on these findings we propose that the GAGA factor and FACT-dependent replacement of Lys 9-methylated histone H3 by H3.3 counteracts the spreading of silent chromatin.