The ATP-dependent chromatin remodeller Mi-2 functions as a transcriptional repressor and contributes to the suppression of cell fates during development in several model organisms. Mi-2 is the ATPase subunit of the conserved Nucleosome Remodeling and Deacetylation (NuRD) complex, and transcriptional repression by Mi-2 is thought to be dependent on its associated histone deacetylase. Here, we have purified a novel dMi-2 complex from Drosophila that is distinct from dNuRD. dMec (dMEP-1 complex) is composed of dMi-2 and dMEP-1. dMec is a nucleosome-stimulated ATPase that is expressed in embryos, larval tissues and adult flies. Surprisingly, dMec is far more abundant than dNuRD and constitutes the major dMi-2-containing complex. Both dNuRD and dMec associate with proneural genes of the achaete-scute complex. However, despite lacking a histone deacetylase subunit, only dMec contributes to the repression of proneural genes. These results reveal an unexpected complexity in the composition and function of Mi-2 complexes.