The Y chromosomes of Drosophila melanogaster and D. simulans contain only a handful of protein-coding genes, which are related to sperm mobility and reproductive fitness. Despite low or absent protein coding polymorphism, the Drosophila Y chromosome has been associated with natural phenotypic variation, including variation in the expression of hundreds to thousands of genes located on autosomes and on the X chromosome. Polymorphisms present in the large blocks of heterochromatin and consisting of differences in the amounts and kinds of sequences for satellite DNA and transposable elements may be the source of this modulation. Here we review the evidence and discuss mechanisms for global epigenetic regulation by repetitious elements in the Y chromosome. We also discuss how the discovery of this new function impacts the current knowledge about Y chromosome origin, its current dynamics, and future fate.