Chromatin structure plays a critical role in the regulation of transcription. Drosophila GAGA factor directs chromatin remodeling to its binding sites. We show here that Drosophila FACT (facilitates chromatin transcription), a heterodimer of dSPT16 and dSSRP1, is associated with GAGA factor through its dSSRP1 subunit, binds to a nucleosome, and facilitates GAGA factor-directed chromatin remodeling. Moreover, genetic interactions between Trithorax-like encoding GAGA factor and spt16 implicate the GAGA factor-FACT complex in expression of Hox genes Ultrabithorax, Sex combs reduced, and Abdominal-B. Chromatin immunoprecipitation experiments indicated the presence of the GAGA factor-FACT complex in the regulatory regions of Ultrabithorax and Abdominal-B. These data illustrate a crucial role of FACT in the modulation of chromatin structure for the regulation of gene expression.