The Fab-7 chromatin domain boundary insures functional autonomy of the iab-6 and iab-7 cis-regulatory domains in the bithorax complex (BX-C). We have previously shown that chromatin insulators such as gypsy or scs(min) are potent insulators that cannot substitute for Fab-7 function within the BX-C. During the early stages of these swapping experiments, we initially used a fragment of scs that was slightly larger than a minimal scs element (scs(min)). We report that this scs fragment, unlike scs(min), interferes in an orientation-dependent manner with the output of a regulatory region covering 80 kb of DNA (from iab-4 to iab-8). At the core of this orientation-dependent phenotype is a promoter located immediately adjacent to the scs insulator. In one orientation, the promoter traps the activity of the iab-3 through iab-5 cis-regulatory domains, diverting them from the abd-A gene. In the opposite orientation, the promoter is transcribing the iab-7 cis-regulatory domain, resulting in ectopic activation of the latter. Our data suggest that transcription through a Polycomb-Response Element (PRE) interferes with the maintenance of a Polycomb repression complex.