The MYST histone acetyltransferase (HAT) dTip60 is part of a multimeric protein complex that unites both HAT and chromatin remodeling activities. Here, we sought to gain insight into the biological functions of dTip60. Strong ubiquitous dTip60 knock-down in flies was lethal, whereas knock-down in the wing imaginal disk led to developmental defects in the wing. dTip60 localized to the nucleus in early embryos and was present in a large number of interbands on polytene chromosomes. Genome-wide expression analysis upon depletion of dTip60 in cell culture showed that it regulated a large number of genes in Drosophila, among which those with chromatin-related functions were highly enriched. Surprisingly, a significant portion of these genes were upregulated upon dTip60 loss, indicating that dTip60 has repressive as well as activating functions. dTip60 protein was directly located at promoter regions of a subset of repressed genes, suggesting a direct role in gene repression. Comparison of the gene expression signature of dTip60 downregulation with that of histone deacetylase inhibition with trichostatin A revealed a significant correlation, suggesting that the dTip60 complex recruits an HDAC-containing complex to regulate gene expression in the Drosophila genome.