Drosophila Argonaute2 (AGO2) has been shown to regulate expression of certain loci in an RNA interference (RNAi)-independent manner, but its genome-wide function on chromatin remains unknown. Here, we identified the nuclear scaffolding protein LaminB as a novel interactor of AGO2. When either AGO2 or LaminB are depleted in Kc cells, similar transcription changes are observed genome-wide. In particular, changes in expression occur mainly in active or potentially active chromatin, both inside and outside LaminB-associated domains (LADs). Furthermore, we identified a somatic target of AGO2 transcriptional repression, no hitter (nht), which is immersed in a LAD located within a repressive topologically-associated domain (TAD). Null mutation but not catalytic inactivation of AGO2 leads to ectopic expression of nht and downstream spermatogenesis genes. Depletion of either AGO2 or LaminB results in reduced looping interactions within the nht TAD as well as ectopic inter-TAD interactions, as detected by 4C-seq analysis. Overall, our findings reveal coordination of AGO2 and LaminB function to dictate genome architecture and thereby regulate gene expression.