Insulator sequences guide the function of distantly located enhancer elements to the appropriate target genes by blocking inappropriate interactions. In Drosophila, five different insulator binding proteins have been identified, Zw5, BEAF-32, GAGA factor, Su(Hw) and dCTCF. Only dCTCF has a known conserved counterpart in vertebrates. Here we find that the structurally related factors dCTCF and Su(Hw) have distinct binding targets. In contrast, the Su(Hw) interacting factor CP190 largely overlapped with dCTCF binding sites and interacts with dCTCF. Binding of dCTCF to targets requires CP190 in many cases, whereas others are independent of CP190. Analysis of the bithorax complex revealed that six of the borders between the parasegment specific regulatory domains are bound by dCTCF and by CP190 in vivo. dCTCF null mutations affect expression of Abdominal-B, cause pharate lethality and a homeotic phenotype. A short pulse of dCTCF expression during larval development rescues the dCTCF loss of function phenotype. Overall, we demonstrate the importance of dCTCF in fly development and in the regulation of abdominal segmentation.