The GATA factor Pannier (Pnr) activates proneural expression through binding to a remote enhancer of the achaete-scute (ac-sc)complex. Chip associates both with Pnr and with the (Ac-Sc)-Daughterless heterodimer bound to the ac-sc promoters to give a proneural complex that facilitates enhancer-promoter communication during development. Using a yeast two-hybrid screening, we have identified Toutatis (Tou), which physically interacts with both Pnr and Chip. Loss-of-function and gain-of-function experiments indicate that Tou cooperates with Pnr and Chip during neural development. Tou shares functional domains with chromatin remodelling proteins, including TIP5 (termination factor TTFI-interacting protein 5) of NoRC (nucleolar remodelling complex), which mediates repression of RNA polymerase 1 transcription. In contrast, Tou acts positively to activate proneural gene expression. Moreover, we show that Iswi associates with Tou, Pnr and Chip, and is also required during Pnr-driven neural development. The results suggest that Tou and Iswi may belong to a complex that directly regulates the activity of Pnr and Chip during enhancer-promoter communication, possibly through chromatin remodelling.