Several multiprotein DNA complexes capable of insulator activity have been identified in Drosophila melanogaster, yet only CTCF, a highly conserved zinc finger protein, and the transcription factor TFIIIC have been shown to function in mammals. CTCF is involved in diverse nuclear activities, and recent studies suggest that the proteins with which it associates and the DNA sequences that it targets may underlie these various roles. Here we show that the Drosophila homolog of CTCF (dCTCF) aligns in the genome with other Drosophila insulator proteins such as Suppressor of Hairy wing [SU(HW)] and Boundary Element Associated Factor of 32 kDa (BEAF-32) at the borders of H3K27me3 domains, which are also enriched for associated insulator proteins and additional cofactors. RNAi depletion of dCTCF and combinatorial knockdown of gene expression for other Drosophila insulator proteins leads to a reduction in H3K27me3 levels within repressed domains, suggesting that insulators are important for the maintenance of appropriate repressive chromatin structure in Polycomb (Pc) domains. These results shed new insights into the roles of insulators in chromatin domain organization and support recent models suggesting that insulators underlie interactions important for Pc-mediated repression. We reveal an important relationship between dCTCF and other Drosophila insulator proteins and speculate that vertebrate CTCF may also align with other nuclear proteins to accomplish similar functions.