Chromatin assembly is required for the duplication of chromosomes. ACF (ATP-utilizing chromatin assembly and remodeling factor) catalyzes the ATP-dependent assembly of periodic nucleosome arrays in vitro, and consists of Acf1 and the ISWI ATPase. Acf1 and ISWI are also subunits of CHRAC (chromatin accessibility complex), whose biochemical activities are similar to those of ACF. Here we investigate the in vivo function of the Acf1 subunit of ACF/CHRAC in Drosophila. Although most Acf1 null animals die during the larval-pupal transition, Acf1 is not absolutely required for viability. The loss of Acf1 results in a decrease in the periodicity of nucleosome arrays as well as a shorter nucleosomal repeat length in bulk chromatin in embryos. Biochemical experiments with Acf1-deficient embryo extracts further indicate that ACF/CHRAC is a major chromatin assembly factor in Drosophila. The phenotypes of flies lacking Acf1 suggest that ACF/CHRAC promotes the formation of repressive chromatin. The acf1 gene is involved in the establishment and/or maintenance of transcriptional silencing in pericentric heterochromatin and in the chromatin-dependent repression by Polycomb group genes. Moreover, cells in animals lacking Acf1 exhibit an acceleration of progression through S phase, which is consistent with a decrease in chromatin-mediated repression of DNA replication. In addition, acf1 genetically interacts with nap1, which encodes the NAP-1 nucleosome assembly protein. These findings collectively indicate that ACF/CHRAC functions in the assembly of periodic nucleosome arrays that contribute to the repression of genetic activity in the eukaryotic nucleus.