Polycomb group proteins are required for long-term repression of many genes in Drosophila and all metazoans. In Drosophila, DNA fragments called Polycomb-group response elements (PREs) have been identified that mediate the action of Polycomb-group proteins. Previous studies have shown that a 2 kb fragment located from -2.4 kb to -395 bp upstream of the Drosophila engrailed promoter contains a multipartite PRE that can mediate mini-white silencing and act as a PRE in an Ubx-reporter construct. Here, we study the role of this 2 kb fragment in the regulation of the engrailed gene itself. Our results show that within this 2 kb fragment, there are two subfragments that can act as PREs in embryos. In addition to their role in gene silencing, these two adjacent PRE fragments can facilitate the activation of the engrailed promoter by distant enhancers. The repressive action of the engrailed PRE can also act over a distance. A 181 bp subfragment can act as a PRE and also mediate positive effects in an enhancer-detector construct. Finally, a deletion of 530 bp of the 2 kb PRE fragment within the endogenous engrailed gene causes a loss-of-function phenotype, showing the importance of the positive regulatory effects of this PRE-containing fragment. Our data are consistent with the model that engrailed PREs bring chromatin together, allowing both positive and negative regulatory interactions between distantly located DNA fragments.