Robust and synchronous repression of E2F-dependent gene expression is critical to the proper timing of cell cycle exit when cells transition to a postmitotic state. Previously NuA4 was suggested to act as a barrier to proliferation in Drosophila by repressing E2F-dependent gene expression. Here we show that NuA4 activity is required for proper cell cycle exit and the repression of cell cycle genes during the transition to a postmitotic state in vivo However, the delay of cell cycle exit caused by compromising NuA4 is not due to additional proliferation or effects on E2F activity. Instead NuA4 inhibition results in slowed cell cycle progression through late S and G2 phases due to aberrant activation of an intrinsic p53-independent DNA damage response. A reduction in NuA4 function ultimately produces a paradoxical cell cycle gene expression program, where certain cell cycle genes become derepressed in cells that are delayed during the G2 phase of the final cell cycle. Bypassing the G2 delay when NuA4 is inhibited leads to abnormal mitoses and results in severe tissue defects. NuA4 physically and genetically interacts with components of the E2F complex termed D: rosophila, R: bf, E: 2F A: nd M: yb/ M: ulti-vulva class B: (DREAM/MMB), and modulates a DREAM/MMB-dependent ectopic neuron phenotype in the posterior wing margin. However, this effect is also likely due to the cell cycle delay, as simply reducing Cdk1 is sufficient to generate a similar phenotype. Our work reveals that the major requirement for NuA4 in the cell cycle in vivo is to suppress an endogenous DNA damage response, which is required to coordinate proper S and G2 cell cycle progression with differentiation and cell cycle gene expression.