Polycomb group (PcG) proteins exist in multiprotein complexes that modify chromatin to repress transcription. Drosophila PcG proteins Sex combs extra (Sce; dRing) and Posterior sex combs (Psc) are core subunits of PRC1-type complexes. The Sce:Psc module acts as an E3 ligase for monoubiquitylation of histone H2A, an activity thought to be crucial for repression by PRC1-type complexes. Here, we created an Sce knockout allele and show that depletion of Sce results in loss of H2A monoubiquitylation in developing Drosophila. Genome-wide profiling identified a set of target genes co-bound by Sce and all other PRC1 subunits. Analyses in mutants lacking individual PRC1 subunits reveals that these target genes comprise two distinct classes. Class I genes are misexpressed in mutants lacking any of the PRC1 subunits. Class II genes are only misexpressed in animals lacking the Psc-Su(z)2 and Polyhomeotic (Ph) subunits but remain stably repressed in the absence of the Sce and Polycomb (Pc) subunits. Repression of class II target genes therefore does not require Sce and H2A monoubiquitylation but might rely on the ability of Psc-Su(z)2 and Ph to inhibit nucleosome remodeling or to compact chromatin. Similarly, Sce does not provide tumor suppressor activity in larval tissues under conditions in which Psc-Su(z)2, Ph and Pc show such activity. Sce and H2A monoubiquitylation are therefore only crucial for repression of a subset of genes and processes regulated by PRC1-type complexes. Sce synergizes with the Polycomb repressive deubiquitinase (PR-DUB) complex to repress transcription at class I genes, suggesting that H2A monoubiquitylation must be appropriately balanced for their transcriptional repression.