Chromatin insulators, or boundary elements, appear to control eukaryotic gene expression by regulating interactions between enhancers and promoters. Boundaries have been identified in the 3' cis-regulatory region of Abd-B, which is subdivided into a series of separate iab domains. Boundary elements such as Mcp, Fab-7, and Fab-8 and adjacent silencers flank the iab domains and restrict the activity of the iab enhancers. We have identified an insulator in the 755-bp Mcp fragment that is linked to the previously characterized Polycomb response element (PRE) and silences the adjacent genes. This insulator blocks the enhancers of the yellow and white genes and protects them from PRE-mediated repression. The interaction between the Mcp elements, each containing the insulator and PRE, allows the eye enhancer to activate the white promoter over the repressed yellow domain. The same level of white activation was observed when the Mcp element combined with the insulator alone was interposed between the eye enhancer and the promoter, suggesting that the insulator is responsible for the interaction between the Mcp elements.