Drosophila Myb (Dm-Myb) encodes a protein that plays a key role in regulation of mitotic phase genes. Here, we further refine its role in the context of a developing tissue as a potentiator of gene expression required for proper RNA polymerase II (RNA Pol II) function and efficient H3K4 methylation at promoters. In contrast to its role in gene activation, Myb is also required for repression of many genes, although no specific mechanism for this role has been proposed. We now reveal a critical role for Myb in contributing to insulator function, in part by promoting binding of insulator proteins BEAF-32 and CP190 and stabilizing H3K27me3 Polycomb-group (PcG) domains. In the absence of Myb, H3K27me3 is markedly reduced throughout the genome, leading to H3K4me3 spreading and gene derepression. Finally, Myb is enriched at boundaries that demarcate chromatin environments, including chromatin loop anchors. These results reveal functions of Myb that extend beyond transcriptional regulation.