The Drosophila nucleosome remodeling factor (NURF) is an ISWI-containing chromatin remodeling complex that catalyzes ATP-dependent nucleosome sliding. By sliding nucleosomes, NURF has the ability to alter chromatin structure and regulate transcription. Previous studies have shown that mutation of Drosophila NURF induces melanotic tumors, implicating NURF in innate immune function. Here, we show that NURF mutants exhibit identical innate immune responses to gain-of-function mutants in the Drosophila JAK/STAT pathway. Using microarrays, we identify a common set of target genes that are activated in both mutants. In silico analysis of promoter sequences of these defines a consensus regulatory element comprising a STAT-binding sequence overlapped by a binding-site for the transcriptional repressor Ken. NURF interacts physically and genetically with Ken. Chromatin immunoprecipitation (ChIP) localizes NURF to Ken-binding sites in hemocytes, suggesting that Ken recruits NURF to repress STAT responders. Loss of NURF leads to precocious activation of STAT target genes.