Abstract The histone demethylase LSD1 is a key chromatin regulator that is often deregulated in cancer. Its ortholog, dLsd1 plays a crucial role in Drosophila oogenesis; however, our knowledge of dLsd1 function is insufficient to explain its role in the ovary. Here, we have performed genome-wide analysis of dLsd1 binding in the ovary, and we document that dLsd1 is preferentially associated to the transcription start site of developmental genes. We uncovered an unanticipated interplay between dLsd1 and the GATA transcription factor Serpent and we report an unexpected role for Serpent in oogenesis. Besides, our transcriptomic data show that reducing dLsd1 levels results in ectopic transposable elements (TE) expression correlated with changes in H3K4me2 and H3K9me2 at TE loci. In addition, our results suggest that dLsd1 is required for Piwi dependent TE silencing. Hence, we propose that dLsd1 plays crucial roles in establishing specific gene expression programs and in repressing transposons during oogenesis.