The HMG-box protein Capicua (Cic) is a conserved transcriptional repressor that functions downstream of receptor tyrosine kinase (RTK) signaling pathways in a relatively simple switch: In the absence of signaling, Cic represses RTK-responsive genes by binding to nearly invariant sites in DNA, whereas activation of RTK signaling down-regulates Cic activity, leading to derepression of its targets. This mechanism controls gene expression in both Drosophila and mammals, but whether Cic can also function via other regulatory mechanisms remains unknown. Here, we characterize an RTK-independent role of Cic in regulating spatially restricted expression of Toll/IL-1 signaling targets in Drosophila embryogenesis. We show that Cic represses those targets by binding to suboptimal DNA sites of lower affinity than its known consensus sites. This binding depends on Dorsal/NF-κB, which translocates into the nucleus upon Toll activation and binds next to the Cic sites. As a result, Cic binds to and represses Toll targets only in regions with nuclear Dorsal. These results reveal a mode of Cic regulation unrelated to the well-established RTK/Cic depression axis and implicate cooperative binding in conjunction with low-affinity binding sites as an important mechanism of enhancer regulation. Given that Cic plays a role in many developmental and pathological processes in mammals, our results raise the possibility that some of these Cic functions are independent of RTK regulation and may depend on cofactor-assisted DNA binding.