The E2F transcription factors are important regulators of the cell cycle whose function is commonly misregulated in cancer. To identify novel regulators of E2F1 activity in vivo, we used Drosophila to conduct genetic screens. For this, we generated transgenic lines that allow the tissue-specific depletion of dE2F1 by RNAi. Expression of these transgenes using Gal4 drivers in the eyes and wings generated reliable and modifiable phenotypes. We then conducted genetic screens testing the capacity of Exelixis deficiencies to modify these E2F1-RNAi phenotypes. From these screens, we identified mutant alleles of Suppressor of zeste 2 [Su(z)2] and multiple Polycomb group genes as strong suppressors of the E2F1-RNA interference phenotypes. In validation of our genetic data, we find that depleting Su(z)2 in cultured Drosophila cells restores the cell-proliferation defects caused by reduction of dE2F1 by elevating the level of dE2f1. Furthermore, analyses of methylation status of histone H3 lysine 27 (H3K27me) from the published modENCODE data sets suggest that the genomic regions harboring dE2f1 gene and certain dE2f1 target genes display H3K27me during development and in several Drosophila cell lines. These in vivo observations suggest that the Polycomb group may regulate cell proliferation by repressing the transcription of dE2f1 and certain dE2F1 target genes. This mechanism may play an important role in coordinating cellular differentiation and proliferation during Drosophila development.