Polycomb transcriptional silencing machinery is implicated in the maintenance of precursor fates, but how this repression is reversed to allow cell differentiation is unknown. Here we show that testis-specific TAF (TBP-associated factor) homologs required for terminal differentiation of male germ cells may activate target gene expression in part by counteracting repression by Polycomb . Chromatin immunoprecipitation revealed that testis TAFs bind to target promoters, reduce Polycomb binding, and promote local accumulation of H3K4me3, a mark of Trithorax action. Testis TAFs also promoted relocalization of Polycomb Repression Complex 1 components to the nucleolus in spermatocytes, implicating subnuclear architecture in the regulation of terminal differentiation.