Metazoan transcriptional repressors regulate chromatin through diverse histone modifications. Contributions of individual factors to the chromatin landscape in development is difficult to establish, as global surveys reflect multiple changes in regulators. Therefore, we studied the conserved Hairy/Enhancer of Split family repressor Hairy, analyzing histone marks and gene expression in Drosophila embryos. This long-range repressor mediates histone acetylation and methylation in large blocks, with highly context-specific effects on target genes. Most strikingly, Hairy exhibits biochemical activity on many loci that are uncoupled to changes in gene expression. Rather than representing inert binding sites, as suggested for many eukaryotic factors, many regions are targeted errantly by Hairy to modify the chromatin landscape. Our findings emphasize that identification of active cis-regulatory elements must extend beyond the survey of prototypical chromatin marks. We speculate that this errant activity may provide a path for creation of new regulatory elements, facilitating the evolution of novel transcriptional circuits.