Polycomb-group (PcG) and trithorax-group (trxG) genes encode important regulators of homeotic genes, repressors and activators, respectively. They act through epigenetic mechanisms that maintain chromatin structure. The corto gene of Drosophila melanogaster encodes a co-factor of these regulators belonging to the Enhancer of Trithorax and Polycomb class. We have previously shown that Corto maintains the silencing of the homeotic gene Abdominal-B in the embryo and that it interacts with a cyclin, Cyclin G, suggesting that it could be a major actor in the connection between Polycomb/Trithorax function and the cell cycle. We show here that inactivation of Cyclin G by RNA interference leads to rotated genitalia and cuticle defects in the posterior abdomen of pupae and that corto genetically interacts with Cyclin G for generating these phenotypes. Examination of these pupae shows that development of the dorsal histoblast nests that will give rise to the adult epithelium is impaired in the posterior segments which identity is specified by Abdominal-B. Using a line that expresses LacZ in the Abdominal-B domain, we show that corto maintains Abdominal-B repression in the pupal epithelium whereas Cyclin G maintains its activation. These results prompt us to propose that the interaction between the Enhancer of Trithorax and Polycomb Corto and Cyclin G is involved in regulating the balance between cell proliferation and cell differentiation during abdominal epithelium development.