Human ETS Related Gene, ERG, a master transcription factor, turns oncogenic upon its out-of-context activation in diverse developmental lineages. However, the mechanism underlying its lineage-specific activation of Notch (N), Wnt, or EZH2-three well-characterized oncogenic targets of ERG-remains elusive. We reasoned that deep homology in genetic tool kits might help uncover such elusive cancer mechanisms in Drosophila. By heterologous gain of human ERG in Drosophila, here we reveal Chip, which codes for a transcriptional coactivator, LIM-domain-binding (LDB) protein, as its novel target. ERG represses Drosophila Chip via its direct binding and, indirectly, via E(z)-mediated silencing of its promoter. Downregulation of Chip disrupts LIM-HD complex formed between Chip and Tailup (Tup)-a LIM-HD transcription factor-in the developing notum. A consequent activation of N-driven Wg signaling leads to notum-to-wing transdetermination. These fallouts of ERG gain are arrested upon a simultaneous gain of Chip, sequestration of Wg ligand, and, alternatively, loss of N signaling or E(z) activity. Finally, we show that the human LDB1, a homolog of Drosophila Chip, is repressed in ERG-positive prostate cancer cells. Besides identifying an elusive target of human ERG, our study unravels an underpinning of its lineage-specific carcinogenesis.