Polycomb group (PcG) complexes are multiprotein assemblages that bind to chromatin and establish chromatin states leading to epigenetic silencing. PcG proteins regulate homeotic genes in flies and vertebrates, but little is known about other PcG targets and the role of the PcG in development, differentiation and disease. Here, we determined the distribution of the PcG proteins PC, E(Z) and PSC and of trimethylation of histone H3 Lys27 (me3K27) in the D. melanogaster genome. At more than 200 PcG target genes, binding sites for the three PcG proteins colocalize to presumptive Polycomb response elements (PREs). In contrast, H3 me3K27 forms broad domains including the entire transcription unit and regulatory regions. PcG targets are highly enriched in genes encoding transcription factors, but they also include genes coding for receptors, signaling proteins, morphogens and regulators representing all major developmental pathways.